LQD: Energy policy for slow learners

by Frank Schnittger Wed Feb 3rd, 2010 at 05:47:57 AM EST

Or hot air from slow burners?

Labour prepares to tear up 12 years of energy policy

The Government is drawing up plans for a wholesale reform of Britain's energy markets that could wind back the clock on 12 years of deregulation.
In an interview with The Times, Ed Miliband, the Energy and Climate Change Secretary, said that Britain's existing, highly liberalised market regime, introduced under Labour in 1998, was failing to deliver the investment needed to cut UK carbon emissions by more than a third by 2020.
A market structure was being designed to boost long-term investment in low-carbon sources of electricity, including wind parks, nuclear reactors and fossil fuel stations equipped with carbon capture and storage (CCS) technology.
Mr Miliband said: "We are going to need a more interventionist energy policy to deliver the low-carbon investment we need."

frontpaged - Nomad

Labour prepares to tear up 12 years of energy policy

Mr Miliband said that changes being considered included: reform of Ofgem, the energy regulator, to improve care for consumers; an overhaul of Britain's existing new electricity trading arrangements (Neta), which have been in place for more than ten years; and the introduction of "capacity payments" to guarantee returns to developers of low-carbon sources of power.
Mr Miliband said that big reforms would be essential to deliver the estimated £170 billion of investment to meet its goals of huge carbon cuts. The Neta system, in which electricity is traded via contracts between buyers and sellers or power exchanges, does not give sufficient guarantees to developers of wind turbines and nuclear plants.
He said that one alternative would be a return to "capacity payments" -- in which power station operators would be paid for the electricity they generate and also for capacity made available. The idea of such payments is to give greater certainty to investors in renewable and nuclear energy. They would help to bolster the reliability of a grid that was more heavily reliant on power generation from wind farms.
He said: "This is very different from the current system, where you get paid for the electricity you produce and are not given any guarantees in advance. In future you could say `We need a certain amount of low-carbon capacity' and generators would say how much they can provide."
Such a move would be one of the biggest changes in Britain's energy market since the 1989 Electricity Act, which began deregulation. It would also represent a return to some of the principles of the system before 1998. The Electricity Pool, which Neta replaced, had capacity payments but was criticised for being too inflexible. Mr Miliband said that details of the reforms would be in a document to be published in April called Roadmap to 2050, published with the 2010 Budget. He said that the changes were essential to help Britain to prepare for a doubling of electricity demand by 2050, driven by other policy objectives such as a growth of electric cars and a move from gas to electricity for heating.
A huge expansion of wind power is expected to have a big impact on the reliability of the national grid, which capacity payments could help to offset. Wind energy is intermittent and heavily reliant on back-up power generation for use when it is not blowing.

Who'd have thunk? What a strange Yurpean idea. Intervening in markets. Is paying for "capacity" rather than output not socialism - developing a non-market driven energy policy when the markets were supposed to be weaving their "magic". Where is the hidden hand?

What a pity this seems like a death-bed conversion. Labour sees the light just as it is in grave danger of being ousted by a liberalising Tory Government. Or is this just Ed Miliband positioning himself for the leadership contest that is sure to follow a Labour defeat?

But if the markets can be wrong on energy, can they not also be wrong on banking, property, wages and the environment. Or are "externalities" like planet earth, finite resources, systemic risk, reliability and resilience, security and human needs finally beginning to be taken into account?

It is worth noting that the comment thread - on the Murdock Times - is almost universally hostile, ranging from free marketeers, climate change deniers, the emotionally anti-Labour, and UK nationalists decrying immigration or dependence on Russia. Some samples:

Labour prepares to tear up 12 years of energy policy

Dell Miller wrote: Whenever govt meddles in the free market, bad things happen. Moreso when that govt is very dumb. The fact that dodgy science is part of the reasoning makes it all the more silly.

David Martin wrote: Only a fool or a politician would propose off-shore wind as a power source.
At a minimum of 3 times the price of nuclear power it would still be utterly useless in the recent cold snap, for instance, and so would have to be backed up one for one by gas plants.
How many pensioners will freeze to death as they can't afford heat?
Thing bills 3 times current levels.

Simon Newbold wrote: £170 billion pounds to meet its goal of carbon cuts????

To put this in perspective, CO2 comprises 0.04% of the atmosphere, and the UK emits 2% of global emissions.

This moron is therefore, apparently stating that it is worth £170 billion pounds of taxpayers money to reduce the CO2 in the atmosphere by 0.008%.

Is it just me, or do these figures make no sense at all???

And all this at a time when the IPCC has been shown to have deliberately falsified science and suppressed any evidence that contradicts their preconceived agenda, that AGW, or climate change is totally man-made!

LQD: Energy policy for slow learners | 97 comments (97 topical, 0 editorial, 0 hidden)

Re: LQD: Energy policy for slow learners (4.00 / 8)

Aieeeee! Frank! Did you have to post samples of comments? Now I'll be even gloomier than usual about the human race for the rest of the day...

by Metatone (metatone [a|t] gmail (dot) com) on Mon Feb 1st, 2010 at 06:53:11 AM EST

Re: LQD: Energy policy for slow learners (4.00 / 3)

[Murdoch Alert] Should this have to come with a health warning?

notes from no w here

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Feb 1st, 2010 at 08:11:42 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

Think of it as an immunization process where you get exposed to a low level of contaminant (I'm sure there's plenty of this where that comes from).

Better grow a thick hide: conservative are not getting any more intelligent....

by Bernard (bernard) on Mon Feb 1st, 2010 at 08:30:26 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 0)

Or perhaps as in homoeopathy, small does of poison can cure you!

notes from no w here

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Feb 1st, 2010 at 08:33:27 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

heavily reliant on back-up power generation for use when it is not blowing.

As opposed to nuclear plants when they go offline for maintenance?...

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon Feb 1st, 2010 at 08:02:02 AM EST

Re: LQD: Energy policy for slow learners (4.00 / 3)

What a pity this seems like a death-bed conversion.

And even that just half-way. It seems to be partly borne out of the realisation that private capital just won't kick off the nuclear renaissance long prepared by NuLab; and now they added the coal industry's alibi greenwashing technology, CCS.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon Feb 1st, 2010 at 08:06:11 AM EST

Re: LQD: Energy policy for slow learners (4.00 / 6)

I've been contemplating a diary on the Spanish experience with wind energy. There are so many little things that played out in big ways there.

First, Spain in the only country in the world where electricity production and distribution are conducted by separate entities. By law, ownership by electricity producers, i.e. Iberdrola, etc, is extremely limited. The Spanish electric grid is run by a single corporation which until recently was primarily government owned, REE. This creates much more of a market for electricity than where the grid is controlled by producers. I question whether the EU and US shouldn't follow up on the Spanish example and create a national grid.

Second, where the government has ownership in the grid it has a whole body of policy instruments available to it that aren't otherwise available. This doesn't require government ownership, but one of the things that the Spanish did is set up a schedule of priority for electric production. During December of last year, wind energy was supplying more than half of the country's electricity. Because of the law granting priority to wind energy production, the national grid stopped accepting electric production from fossil fuel based plants because there was an oversupply. It's really quite brilliant, because that solves the problem of back-up generation.

What I would propose is that countries engage in energy planning. Set a baseload limit. For any production that occurs over that limit, charge a surplus. Give wind and renewables first priority, so that most every drop of electricity produced in this way gets used. Now the trick comes when you hit that baseload limit. If you have a progessive rate structure. Something like:

1-30GWh 0.10€/kwh
30-35GWh 0.12€/kwh
35-40GWh 0.14€/kwh

This is just a made up schedule. But, that means that in a given hour where 40 GWh of electricity are consumed, that the first 30 GWh bring in €3 million, the second 30-35GWH €600,000, and the last 5 GWh €700,000.

So €4.3 million. Now let's say that 0.10€/kwh is the point at which firms can produce electricity with a reasonable profit for fossil fuel production. That means that you have €1.3 million in profits that can be redistributed without affecting the ability of fossil fuel based firms to provide back up.

Now let's assume that there are 5 GWh of renewables production. What if we redistribute that €1.3 million surplus to a subsidy for renewables production? That would yield a €0.26 subsidy. You can play with the numbers here. But, it seems to me that this would be a good way to use the market to create incentives to reduce demand. And it would build up the portion of baseload production from renewables. And this sort of thing becomes much easier to do if you have an indepednent national grid like in Spain.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Feb 1st, 2010 at 11:15:56 AM EST

Re: LQD: Energy policy for slow learners (none / 1)

one of the things that the Spanish did is set up a schedule of priority for electric production. During December of last year, wind energy was supplying more than half of the country's electricity. Because of the law granting priority to wind energy production, the national grid stopped accepting electric production from fossil fuel based plants because there was an oversupply.

Isn't this substantially what feed-in-tariffs do?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 1st, 2010 at 11:35:57 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 6)

Only when tied to a must accept, take or pay, or other priority regulation.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Mon Feb 1st, 2010 at 01:35:27 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

They are separate issues. A feed in tariff in a situation where wind energy doesn't have access to the grid is worse than one a non-subsidy situation where there is open access to the grid. It was this (plus the fact that most developers had close relationships with existing electric producers) that was important.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Feb 1st, 2010 at 04:16:12 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

BTW, whether feed-in tariffs can be considered a subsidy is subject to heated debates.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon Feb 1st, 2010 at 05:34:45 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

Feed-in tariffs usually come with an obligation for distributors to purchase... and that applies to the Spanish version, too.

BTW, Crazy Horse, do you remember the history of the Spanish feed-in law? I seem to recall that there was some weak form in the nineties, which was then reformed with the inspiration (but far from complete copy) of the German feed-in law (also for photovoltaics), but don't remember what that earlier form was.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon Feb 1st, 2010 at 05:36:23 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 4)

In the meantime, I refreshed my memory with this review and comparison of the German and Spanish feed-in laws. The feed-in tariffs were first introduced following the Electric Power Act 54/1997 (which liberalised the electricity generation market in line with the EU line) with Royal Decree 2818/1998. The rates weren't fixed like in the German Stromeinspeisungsgesetz (1991) and the succeeding Erneuerbare-Energien-Gesetz (2000), instead, producers got a premium above the hourly market price -- a regime that prevents producers from predicting their future income reliably. The reform of the Spanish law I remembered was established with Royal Decrees 1432/2002 and 436/2004, which introduced fixed rates as an alternative option producers are free to choose.

The linked article mentions several differences in detail, one I see as significant (again relevant to predicting future income) is degression of the rates: in Germany, a producer gets to sell at the same rate for 20 years, but the rate for new installations is decreased by a fixed percentage; in Spain however, the rate is set each year anew, and affects both new and old installations.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue Feb 2nd, 2010 at 04:47:52 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

God bless the people who write laws.

Yes, the Spanish law doesn't give a fixed rate. I've found it virtually impossible to understand.

There is a more recent law passed in 2007, and it's laid out in terms of maximums and minimums. But, I still don't understand it entirely. Part of it is regulated tariff and a premium for the first 15 years.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Feb 2nd, 2010 at 11:27:57 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

Yes, the Spanish law doesn't give a fixed rate.

It does (or did -- I haven't looked up the latest version), at least fixed on an annual basis. As one of two possible choices for selling the electricity produced. For the other, the spot market version, the premium has a part that is fixed (again for a year), but there is a correction factor taking grid losses into account.

I've found it virtually impossible to understand.

If that helps, I found that amazingly, there are full English translations up on the net.

There is a more recent law passed in 2007

Apparenlty there were almost annual updates, including the one with the big cut in PV.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue Feb 2nd, 2010 at 01:49:03 PM EST
[ Parent ]

Not my specialist subject, but (4.00 / 2)

ManfromMiddletown:

First, Spain in the only country in the world where electricity production and distribution are conducted by separate entities.

The Irish Government engineered a split within the former state monopoly supplier/distributor - ESB - into separate Supply and Network operations - apparently at the EU's behest.

Because the producing arm was still mostly a monopoly, it has been forced to divest itself of a lot of its retail customers by selling wholesale to another state company (Bord Gas) which passes on a 10% discount to customers and still makes a tidy profit.

The Government also allowed huge price hikes in the belief that this would encourage new entrants and develop competition in the market. So far we have had the price hikes but little competition...

AFAIK The ESB was also inhibited from developing new production capacity on the grounds that it already had a dominant position in the market - doh - it used to be the only supplier. This means we are almost entirely dependent on new private entrants to add capacity and enable a switch to renewable...

notes from no w here

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Feb 1st, 2010 at 11:57:24 AM EST
[ Parent ]

Re: Not my specialist subject, but (4.00 / 3)

i.e. we're screwed.

The point of this exercise is to allow for lower prices to industry and higher prices to consumers. Think of it as yet another subsidy. It's all about the "competiveness".

by Colman (colman at eurotrib.com) on Mon Feb 1st, 2010 at 11:59:17 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

First, Spain in the only country in the world where electricity production and distribution are conducted by separate entities.

No, but perhaps the first and most radical. This was actually EU policy, but IIRC it was successfully hollowed out recently.

one of the things that the Spanish did is set up a schedule of priority for electric production

That's less a grid owner side decision, more a consequence of Spain's feed-in law. Wind has similar priority in other EU members with high wind penetration, notably Denmark and Germany. The Spanish grid monopoly combined with an actual government energy policy is certainly a better construction than that of Germany, where the big formerly local monopolist producers still own the grid, and renewables producers had to sue them on the basis of the feed-in law if they tried to deny access.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon Feb 1st, 2010 at 02:20:43 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 5)

My understanding was that it was the only case. At the very least, the idea far predates Spanish participation in the EU. It was created in 1985, before Spanish EU membership.

Red Eléctrica was the first company in the world dedicated exclusively to power transmission and the operation of electrical systems. A pioneer in its field, the company occupies a position of leadership today in these activities.
When it was created in 1985, it took over the transmission grid and the operation of the Spanish power system, well before the recent world-wide trend towards the segregation of activities, establishing transmission as a separate activity from generation and distribution. This marked a radical change in how the Spanish power sector operated and served as a model for other countries when liberalising their power sectors.

I understand that there is a push to independent system operators, but in the end the infrastructure is still owned by same companies that produce electricity.

See my response above about the priority for wind energy. It's separate from the issue of subsidies. It is possible to have one but not the other. I honestly don't know the specifics of the law in Germany and Denmark. I only know that the growth of wind energy in Spain was much more impressive, and the period much more compressed.

According to EWEA figures, 1998-2008, wind capacity in Spain grew, on average, 37% annually. In Germany, this figure was 25%. In Denmark, 9%. Virtually no capacity was added in Denmark between 2003-2008. They hit a wall, or rather they ran out of land based sites. Spanish annual growth continues to be in the double digits (in % terms.)

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Feb 1st, 2010 at 04:29:32 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 5)

Denmark did hit a wall.

The wall was called Anders Fogh Rasmussen. The Don Quixote of the Danish wind industry, as another ETer so aptly put it.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 1st, 2010 at 05:24:44 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

I checked and was surprised to find that he is only partially to blame: the switch to the failed certificates system (which in its final implementation killed on-shore) was decided in 2000 already.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue Feb 2nd, 2010 at 05:32:13 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

It was created in 1985, before Spanish EU membership.

OK, I didn't know that. But you should be aware that it is not the only case: there was separation in California before the great (fake) California Energy Crisis, too. Within the EU, still predating the EU-level deregulation drive, England & Wales had it. Post-deregulation, the most notable separation of generation and grid (at least of those I am aware of) is Italy's.

In Denmark, 9%. Virtually no capacity was added in Denmark between 2003-2008. They hit a wall, or rather they ran out of land based sites.

Nope. There was a government change. And the new government changed rules on purpose. Which was easier, given that unlike Germany and Spain, Denmark had no feed-in law (which obligates distributors to buy the generated wind electricity, in effect giving priority to wind).

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon Feb 1st, 2010 at 05:30:47 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 0)

You are probably right about Rasmussen. I don't know. Site availablity was a factor. Notice the growth offshore.

The problem that I see with a feed in tariff is that this does nothing create a disincentive for use during peak periods. So the policy is basically based on expanding supply instead of cutting demand.

The second thing is that wind is never going to be dispatchable in the same way that coal power, for example, is. You can't just flip on a switch at will. Which is why I think that it is important that wind energy be used before that back-up from coal and the like is called in.

Those forms of energy are dispatchable, and by having a rate schedule that increases with increased use you create an incentive for conservation. At the same time, this is dispatchable. And, you can use the premium generated to fund a feed in tariff (subsidy) for renewables. So that kills the back-up argument against wind power, and it creates a clever funding mechanism that encourages conservation.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Feb 1st, 2010 at 05:52:57 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

Site availablity was a factor.

No, not when growth goes to zero. Which actually happened twice: first in 2002, then there was a special programme for repowering, which was such a success that it ashamed Rasmussen & co, but it was time-limited.

Notice the growth offshore.

The growth off-shore was a 25-year plan meted out nicely year-by-year by the SocDem government of the other Rasmussen in the nineties, with the aim to bring wind above 50% at least. However, in the early 2000s, Anders Fogh Rasmussen said that on-shore wind expansion was such a success that quotas for renewables have already been surpassed, so there is no need to continue with his predecessors' off-shore schedule -- and delayed further projects indefinitely while allowing the finishing of the two in-construction farms. Five years later, he was forced to re-think, and the next three projects were allowed to go ahead. The fun thing in all this was that it was all ideological: Denmark has two major semi-monopolist utilities that also own the grid [or at least that was the situation until a few years ago], both of which supported wind; and the gutting of the Danish wind market actually hurt Danish business interests: the wind manufacturers are big industry after all.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon Feb 1st, 2010 at 06:10:40 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

FYI. I don't know that much about Denmark, but I know that in Spain Vestas got quite the surprise when Gamesa up and decided to become a major competitor. Vestas didn't fully divest from Gamesa Eolica until 2002. At that point, Vestas became a marginal player in the Spanish market. And they got quite a shock when Gamesa entered into other markets in Europe. Suddenly this company that their models got off the ground was a major competitor.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Feb 1st, 2010 at 06:20:54 PM EST
[ Parent ]

Vestas vs Gamesa (4.00 / 5)

It was not really a surprise to Vestas... Gamesa bought out the license it had from Vestas, so this was done with Vestas' consent, and in the clear knowledge that they'd compete on their own and likely take over a large portion of the Spanish market.

Spanish business is very protectionist, but in a much less open way than the French are - this is the reason why Gamesa got the license from Vestas in the first place - because otherwise Vestas couldn't have sold in the Spanish market.

Gamesa is still not that big outside of Spain or out of projects by Iberdrola and other Spanish investors.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Feb 1st, 2010 at 08:44:17 PM EST
[ Parent ]

Re: Vestas vs Gamesa (4.00 / 3)

It was not really a surprise to Vestas... Gamesa bought out the license it had from Vestas, so this was done with Vestas' consent, and in the clear knowledge that they'd compete on their own and likely take over a large portion of the Spanish market.

That's interesting, because that's not the impression I got from newsarticles from the time.

Gamesa is still not that big outside of Spain or out of projects by Iberdrola and other Spanish investors.

I definitely get the Iberdrola connection. I ran the numbers from the Spanish wind energy associations wind farm database. I know that there are a number of small development corporations that develop a wind farm that aren't wholly owned by Iberdrola and Iberdrola Renewables. But the relationship (in Spain) seems to be stronger in turns of the % of Gamesa turbines in Iberdrola projects, than in terms of the % of Iberdrola projects as a % of total Gamesa sales. That was something I honed in on while I was writing.

What I'm most interested in is less a matter of the development of wind farm development than the relationship between Gamesa and the Basque regional government. It's that political science thing.

I do appreciate getting some things about the distribution issues cleared up. I know now that I need to go back through what I've written for my paper and change some things. The thesis was basically the importance of the Iberdrola-Gamesa relationship, and the role that the Basque government came in and had in terms of fostering the development of sectoral organizations like the energy cluster (cluster energia)

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Feb 1st, 2010 at 10:01:15 PM EST
[ Parent ]

Re: Vestas vs Gamesa (4.00 / 6)

I'm sure you can draw some valid conclusions from the effect of the Basque government and Gamesa working to save industry in the region. But it's very hard to frame it globally, as you're trying.

Spain could almost be designated a captive market in wind for its own companies, like India. Within that frame, with strong Iberdrola support, Gamesa became a power. But Gamesa has had very limited success when moving to other markets.

Their entry into the US is particularly telling, as their technology was not up to other European standards. Without the support of Iberdrola in the US, Gamesa would have a very hard time. Despite strong relationships with Pennsylvania unions, and the use of converted factories there, Gamesa has had a very hard time finding equilibrium.

The problem of success stories from captive markets not being able to replicate that in more mature markets is not limited to Spain, though by starting small Acciona is certainly moving forward. Suzlon's very tough and expensive entry into the US is a spectacular example of a company very successful, even controlling, of a particular market, yet having a very rocky entry into a more sophisticated market. Suzlon is not out of the woods yet, and without its purchase of REpower would be even deeper in the hole.

The Basque offshore cluster is but a shadow of the North Sea - Baltic cluster, and will have virtually no influence outside of perhaps small Spanish development. At this stage, there is no technology nor expertise replicable to the wider offshore space, Gamesa's 4.5 MW turbine notwithstanding.

Acciona and Gamesa have had tough times in China as well. This is a symptom of coming from a captive market, where the bar is set lower, but is not recognized until higher standards are needed. Smaller Acciona has the strategic advantage here because being smaller, they are able to adjust quicker with their very capable engineering. (Im writing about the wind division, not the entire company.)

To get a clearer picture of the split between Gamesa and Vestas, and the longer-term results, might well take some more digging.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Tue Feb 2nd, 2010 at 05:51:07 AM EST
[ Parent ]

Re: Vestas vs Gamesa (4.00 / 2)

Then again, entry into a foreign market is not only determined by the quality and price of the product and relationship with developers, see Enercon and the USA.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue Feb 2nd, 2010 at 05:57:50 AM EST
[ Parent ]

Enercon US (4.00 / 5)

There's finally a chink in the GE patent armor, as Mitsubishi won the latest round, that they are not infringing. As part of their claim, they stated that GE's initial patent was not fairly awarded, which I'm sure pleased Enercon. Enercon sits very comfortably north of the border in Canada, quietly nursing their top line reputation.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Tue Feb 2nd, 2010 at 06:08:45 AM EST
[ Parent ]

Re: Enercon US (4.00 / 2)

By the way. What do you make of the market share stats on page 6 of the German 2009 stats? That jump of Enercon to 60% primarily at the expense of Vestas.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue Feb 2nd, 2010 at 10:00:02 AM EST
[ Parent ]

Re: Enercon US (4.00 / 2)

Amazing that Enercon can capture such a huge portion of a mature market. Likely based upon performance and reputation, as well as an exceptional O&M infrastructure. Unbelievable (actually, quite believable) that this technology is banned from the US because of patent infringement, when Enercon wrote the book on that technology as the first variable speed turbine.

i suspect in the coming years REpower will grow some, GE will really begin to capture market share with their new 2.5MW machine, Nordex should increase, and if Fuhrländer can increase production and marketing of the W2E turbine, they could cut into Enercon. But it will be tough, and I wouldn't be surprised if GE focuses elsewhere.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Tue Feb 2nd, 2010 at 03:16:38 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

The problem that I see with a feed in tariff is that this does nothing create a disincentive for use during peak periods.

It is true that electricity sold with a feed-in tariff caps the increase of market prices in peak periods, if that increase would otherwise exceed the feed-in tariff. When makret prices would stay below, of course it does the opposite. Either way, why do you want a disincentive in peak periods?

it is important that wind energy be used before that back-up from coal and the like is called in.

As I said two times now, a feed-in law does just that by obligating distributors to buy the wind electricity. That creates a priority, the other producers are forced to throttle production in high wind. That's exactly what happens in Spain and Northern Germany.

a feed in tariff (subsidy)

To expand on why there should be no equation: a feed-in tariff is a guaranteed purchase price. You can at best consider the difference between the tariff and the momentary market price the subsidy. (And it can actually be negative.) But even that is not really a subsidy, because in the end, it is not something paid from a public or private budget, but costs are spread out to customers (or eating away the profits of other producers).

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon Feb 1st, 2010 at 06:27:19 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 5)

a feed in tariff (subsidy)
To expand on why there should be no equation: a feed-in tariff is a guaranteed purchase price. You can at best consider the difference between the tariff and the momentary market price the subsidy. (And it can actually be negative.) But even that is not really a subsidy, because in the end, it is not something paid from a public or private budget, but costs are spread out to customers (or eating away the profits of other producers).

Given that wind power lowers the marginal price when it blows, there is a merit order effect of supporting wind, which reduces prices for all producers at that time and creates savings for consumers. The aggregate value of that merit order effect has been measured in Denmark, Germany and Spain and is now larger than the net subsidy from the feed-in tariff.

In other words, the so-called "subsidy" to wind actually brings prices down for consumers!

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Feb 1st, 2010 at 08:47:15 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

In Norway. The net effect is lower prices, but because Denmark has little investment in load following capacity (The bulk of the coal plants are heat and power, and thus, cannot be turned off or even significantly down in the current weather) most of the load balancing is done by norvegian hydro, which buys wind power low and sells water power back dear later. This is not a technical problem, or even a problem for its green credentials - Water behind the norwegian dams is a limited resource, so to the extent that the number of electrons traded back and forth in this manner sum to zero, they do displace fossil fuels in the end, but since this is done via trading, the bulk of the savings are transferred to the customers of the norwegian utilities, while the subsidy is paid in DK.

Note that if "imports and exports balance" is key to making even the green argument: Norway has no significant fossil generation and will not build any under any circumstances, so net exports merely displace norwegian investment in carbon neutral power, which is not a gain, since the danish power sector is overall the worst CO2 emitter in europe.

by Thomas on Wed Feb 3rd, 2010 at 08:48:56 AM EST
[ Parent ]

No (4.00 / 3)

The consumers in DK get the same lower prices than the consumers in NO. what you mean is that the existing suppliers in DK take a disproportionate hit on their revenues (losing high price production), while NO producers can take advantage of the new price patterns.

Which is as it should be, given that DK incumbents are largely coal-based.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Feb 3rd, 2010 at 11:09:13 AM EST
[ Parent ]

peak periods (4.00 / 2)

The problem that I see with a feed in tariff is that this does nothing create a disincentive for use during peak periods.

Well, if wind is blowing at a peak period, it will alleviate the need for peaker plants to be turned on, thus turning that period into a "non-peak" one (at least in terms of system strain). and if it is not blowing, then the price will go up to very high levels and that creates disincentives for consumption as well as incentives for marginal producers.

The problem is that wholesale price peaks at times of system tension are usually not passed on to consumers, who have no idea they should save. So either you impose fully variable power prices to retail customers, in perfect market-driven fashion, to get consumers to change their behavior at times of high demand and thus high prices, or you find other ways to impose power savings (education, financing of energy saving devices and investments, technical standards for energy consuming goods and services, etc...)

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Feb 1st, 2010 at 08:40:56 PM EST
[ Parent ]

Re: peak periods (4.00 / 3)

Except that there is no "electricity market" for non-industrial consumers.

I'd accept paying a spot price the day my power outlet carried ticker quotations from various distributors and I could pick and choose between them. Maybe. But mostly, I'd really rather that it was treated as an infrastructure business without all that spot market nonsense.

Which is not to say that you can't make some kind of incentive system for the part of the middle load that follows a reasonably stable pattern across the day.

And/or you could improve building codes and energy standards in consumer products. Eliminating standby power in non-critical products (TVs, private computers, etc.) sounds like a good idea to me.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 2nd, 2010 at 02:17:42 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 6)

actually, you can't just switch on coal, that's why coal too is base load. And even with combined cycle gas, the turbine needs to be in a sort of stand by mode to be able to go full load in a short period without shortening the life expectancy too much (and incurring higher O&M costs)

From what I have heard, this standby in Spain is sometimes not profitable anymore as the lucrative peak opportunities are less and less (and lower (!)), therefore owners of CCPP are actually thinking of shutting down their plants for good!

This brings up a whole new set of challanges...

by crankykarsten (cranky (where?) gmx dot organisation) on Wed Feb 3rd, 2010 at 07:34:31 AM EST
[ Parent ]

hmmm (4.00 / 4)

owners of CCPP are actually thinking of shutting down their plants for good!

You know, I have trouble believing this. I could understand utilities being reluctant to invest in new gas-fired plants as they know the capacity factor will be less than required. But existing plants should used as long as it's cash-flow positive, and I don't see that it's not the case often enough to keep the plants spinning.

Do you have public data on this? Is this just political posturing by the utilities?

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Feb 3rd, 2010 at 11:05:37 AM EST
[ Parent ]

Re: hmmm (none / 1)

probably a bit of both. I don't have any real data of a CCPP in Spain incl the relevant price contracts/mechanisms (though maybe I can try to get some...?), this is only from converstations with people who have thought or are thinking of building CCPPs in Spain and muse about the current situation, so it should be taken with a grain of salt. Sorry, should have made that clearer in my post.

by crankykarsten (cranky (where?) gmx dot organisation) on Thu Feb 4th, 2010 at 03:09:26 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

1998-2008, wind capacity in Spain grew, on average, 37% annually. In Germany, this figure was 25%.

Annual installations peaked in Germany in 2002, in Spain in 2007. The growth curves were similar, that's a phase delay. But what both show is the superiority of feed-in laws over certification systems (as used in Denmark or the UK).

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon Feb 1st, 2010 at 05:45:09 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

I still think that the Spanish win this one. The industry cluster based in the northeast (read Bilbao) have diversified into a variety of other clean energy fields. For example, Gamesa just test ran a 4.5 MW model that's probably meant for offshore. This same cluster contains shipyards that are under a lot of stress. When the initial burst of wind farm construction occurred in Spain, the Basques used their lead (Gamesa) in this area in order to resuscitate their ailing steel and machine tools industries. It worked. They haven't expanded, but machine tool employment has held steady.

I suspect that the plan is to do the same thing using the shipbuilding cluster with offshore work. Also, the region is at the forefront of marine energy. Portugal had the largest project currently, but there are projects using bouys at Santona. (Sorry it's in Spanish.)

And there's a really cool project using wind pressure from breakwaters.

There's the grand policy here with tariffs and such, and then there's regional industrial policy based around using the local government to facilitate the development of industrial clusters with backward and forward links. The backward links mean that they breath new life into industries that are on the decline. Forward links means that they open the door to other types of new industries. Like the wind energy cluster around Bilbao did for offshore wind and marine energy. There's even some hope that the solar industry will be able to link into the mirror production that's in place to supply the auto industry in the area.

I ramble. This is going to be my dissertation.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Feb 1st, 2010 at 06:09:38 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

What you describe in the first paragraph happened in Denmark and Northern Germany, too.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon Feb 1st, 2010 at 06:30:02 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 5)

The reasons that Spain is more interesting to me are a little more esoteric. It's an example of a region that started to behave differently than the rest of the country, and then the rest of the country followed. It seems to be a good model for rusted out industrial districts (like the Great Lakes region in the US). It's fascinating at a theoretical level, so it's a good topic to write a dissertation on because it's something that people might cite. And that's the currency of the American professor.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Feb 1st, 2010 at 07:00:13 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

It seems to be a good model for rusted out industrial districts (like the Great Lakes region in the US)

I suggest that in that context, you to look at and add the examples in Eastern Germany. Like at the Great Lakes region, flat land and not much off-shore in Brandenburg or Sachsen-Anhalt, but wind installations expanded rapidly, Enercon was first to build a wind turbine factory in the local 'rust belt', and there is in particular a large number of new photovoltaics companies and factories.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue Feb 2nd, 2010 at 04:56:35 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 0)

has it ever happened, that a solar panel factory was actually powered by a windpower installation?

great combo/use of real estate.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Feb 4th, 2010 at 02:44:38 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

Why not power it with solar power seeing most work is done during daylight? I've heard of building workers going off site because of excessive rain/snow, but would you want solar power workers heading home any time there is no wind?

In Ireland solar power workers would go on strike in protest against excessive wind if it meant they hand to work too hard... runs... (ok, racist, classist, post colonial, bourgeois propaganda, but what the hell - we go home on a sunny day (to save the harvest) because the sun shines so rarely)

notes from no w here

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Feb 4th, 2010 at 03:01:53 PM EST
[ Parent ]

WindGuard's WindKanal (4.00 / 3)

it's not a solar factory, but Deutsche WindGuard's wind tunnel is powered by an Enercon E-82 in the parking lot. Here's a view from the rear, showing one of the two throats.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Thu Feb 4th, 2010 at 04:49:08 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

As a sidenote, there is another Spanish story to tell: that of photovoltaics. With a very generous feed-in tariff, Spain shot ahead in new installations, this time not following but overtaking Germany on the growth curve (in 2008). However, it seems that success was seen as too expensive. Unfortunately, the 'correction' was a drastic cut of the feed-in tariff, throttling the Spanish market (and presumably industry development). The effects were felt world-wide, albeit positively, in that the silicon shortage was over and prices dropped sharply.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon Feb 1st, 2010 at 06:42:09 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

I really think that photovoltaics are going to be more useful for limited applications (like street lights) than for utility level production. Concentrated Solar Power really seems to be winning that particular fight.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Feb 1st, 2010 at 06:57:17 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

Lots of little creeks...

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 1st, 2010 at 07:02:27 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

I really think that photovoltaics are going to be more useful for limited applications (like street lights) than for utility level production.

Why? The electricity production potential of the c. 2.5 GW Spain added in 2008 and Germany in 2009 is well in excess of what CSP will be capable of in the foreseeable future, comparable to that of wind at a similar time in market evolution (let's say ten years ago). In 2008, German photovoltaics (about 5.45 GW at the end of that year) fed 4.3 TWh into the grid, wind (23.9 GW end of year) 40.43 TWh. Most of that PV is rooftop installations. Big is not always better, CSP is NOT winning that particular fight. (Which shouldn't be taken as opposition to CSP.)

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue Feb 2nd, 2010 at 05:08:01 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

Okay, time to kick puppies, I see...

Solar is not green. Doped high-purity silicon wafers do not just magically grow on trees, they are manufactured by chemical industry that leaves a, toxic as all hell, waste stream per megawatt produced that makes nuclear power look like "magical kittens and faries power, INC", a waste stream that has no half life, that just piles up for all eternity. And as if this was not bad enough, even if the producers clean up their act, all forms of solar power inevitably pave over ecosystems with industrial plant. If you put up windmills in a forest, field, or hell, a nature preserve, then the wheel tracks from the construction crew, and the digging for the power line heal over quickly enough, and life goes on, with very little impact on what was there before, apart from the couple of square meters that are the base of the mill. Build a nuke plant, and the number of square meters used for mining, plant ect - is very low per kwh produced.
Solar, on a scale that would actually produce significant power, inherently kills landscapes by the dozens and hundreds of square kilometers stone cold dead Nothing grows without light, and solar power takes all of it where it is built.

by Thomas on Wed Feb 3rd, 2010 at 09:07:02 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 4)

Solar is for residential power, roofs of industrial parks or warehouses, and the Sahara desert.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Carrie (migeru at eurotrib dot com) on Wed Feb 3rd, 2010 at 09:27:18 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

Thomas missed "Most of that PV is rooftop installations" in my comment...

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed Feb 3rd, 2010 at 10:06:25 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

Such solar-derived environmental devastation will be an interesting question to address, when we've reached perhaps 90% south-facing rooftop saturation in solar friendly areas.

Zum Beispiel, Weser Stadion (Werder Bremen)

(construction nearly finished in photo, one year ago)

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Wed Feb 3rd, 2010 at 09:37:57 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

Damn Mobile me, let's see if facebuch works

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Wed Feb 3rd, 2010 at 10:21:12 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

I guess the question is what the environmental impact of manufacturing all those photovoltaic panels is.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Carrie (migeru at eurotrib dot com) on Wed Feb 3rd, 2010 at 10:27:51 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

His second question was regarding land use, destroying natural habitat, etc. to which both you and i responded about the positioning of the cells. Here, no trees were harmed growing on the stadium sides, and only existing rooftop gardens would be destroyed.

thomas was likely using silicon technology when he posted his comment, and he had no problem with that, ubiquitous as such technology is. Given the scales of digital and PV technology, recycling and proper disposal can be assumed to be developing. Life cycle energy costs together with disposal costs should make mass-produced PV very bearable.

also, notice the decent angle for winter sun on the stadium. double benefit, as just to the right of the photo is one of Bremen's giant swimming baths, with 4 diving and giant pools, kid's zones, slides and games, etc., you an get tan from both directions. :-))

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Wed Feb 3rd, 2010 at 10:38:23 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

Rooftop solar is economic lunacy. Even if the panels were free, and they are not, the labor inherent in redoing the roofing of most buildings, with the inherent disruption to traffic, ect, make them more expensive than any other form of power - and either you keep them clean - Which, again, means paying people to do expensive rooftop work, or you let the rain do it, and efficiency takes a signficant hit.

And cost is not something which can be, or should be, ignored. The projected cost of the solar feed in tariff in germany is high enough that if the same money were allocated to nuclear build, the result would be a fully carbon free grid, which would be rather better outcome than the projected build of solar the cost projections assume (single digit percentage of power from solar..)

And just to demonstrate that my objection to solar is not just nuclear advocacy, - there is also the very simple point that the same amount of money spent on "more wind and pumped storage" would also result in vastly more CO2 displacement per Euro spent. As would wave power. or geothermal. Or ocean thermal inclines. Anything and everything is, and will remain, cheaper than rooftop solar, so all subsidies for it are bad policy.
Because the cost of paying people to do rooftop work will never come down. It is possible that sufficiently cheap solar cells will someday make economic sense if you put them up during initial construction, or when a roof needs replacing in any case, but this would make for a really slow build of capacity..

by Thomas on Thu Feb 4th, 2010 at 06:42:37 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

Thomas:

the cost of paying people to do rooftop work will never come down.

It's "economic lunacy" to pay people to do work? Perhaps we should go along with current models of "economic sanity" that are all about treating labour as a cost to be reduced?

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Feb 4th, 2010 at 07:17:54 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 0)

Even if the panels were free, and they are not, the labor inherent in redoing the roofing of most buildings, with the inherent disruption to traffic, ect, make them more expensive than any other form of power

[Citation needed]

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Feb 4th, 2010 at 07:30:57 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

This argument always feels like kicking puppies because getting your own power from your own roof is such an attractive idea, but heck, here are the top results google gives for "Price of rooftop solar per kwh":
http://www.marsdd.com/blog/2009/03/18/roof-top-solar-system-anyone/ - About proposed feed in tarrifs in canada (solar, in Canada? WTF?) - note that the tarrif for rooftop is 40 cents higher than for ground. This would be the canadian governments estimate of the extra cost of installing on (existing) roofs.

http://egpreston.com/costofcentralsolar.pdf

cites a cost of installation of 4 dollars/watt, at a capacity factor of 15 %, which is shit compared to.. anything.
(the author also makes a fairly compelling case for the economics of rooftop solar with cheap panels in new build. Logic does not hold water for retrofits, as the author costed the labor of a normal roof refit at 0. Which only makes sense if you are looking solely for the diffrence between a solar roof and a regular roof you are putting up in any case)

by Thomas on Thu Feb 4th, 2010 at 08:50:17 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

solar, in Canada? WTF?

Most of Canada's population lives to the South of Frankfurt... maybe even Munich.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Feb 4th, 2010 at 08:58:36 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

However, as long as you have unemployed construction workers, construction labour is indeed free, unless you propose to employ those same construction workers elsewhere, something the market will not do if left to its own devices.

So essentially, your figures support the argument that retrofit rooftop PV should be installed as a counter-cyclical policy during a construction slump.

I suppose you could make a case for doing counter-cyclical nuclear buildouts instead, but I am not convinced that the lead times on nuclear plants make that viable for the initial phases of a recession.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Feb 4th, 2010 at 09:09:17 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

Oh mostly I figure we should employ the lot of them building electric rail, and yes, nukes. Europe may be the most heavily rail built area in the world, but its still not nearly enough, as you can see from the rather depressingly low faction of freight that is moved by rail
Europe has poor freight utilization of rail because european freight rail is very slow due to all the lines being jammed full with passenger trains. - We should build a europe wide HSR net for people and rededicate the regular lines for freight.

by Thomas on Thu Feb 4th, 2010 at 09:31:35 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

I think both nuclear plants (possibly your speciality) and state-of-the-art railways (my speciality) require more specialised workers than rooftop and electrical installers, and it's a more centralised form of employment.

We should build a europe wide HSR net for people and rededicate the regular lines for freight.

And local passengers.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Feb 4th, 2010 at 09:40:07 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

Europe has poor freight utilization of rail because european freight rail is very slow due to all the lines being jammed full with passenger trains.

There is slowness from lower priority related stops, but the latter are not due to the number of passenger trains, but the speed differential -- and that more vs. expresses than stopping trains. In that sense, replacing expresses with high-speed trains on dedicated lines would indeed be the way to go. I note though that due to noise issues, currently ever more countries return to the (IMO bad) idea to put freight trains on the high-speed lines (because those are avoiding lines), and hope that advanced signalling will improve capacity.

Meanwhile, European railfreight is also slow due to a low top speed of trains, inefficient switching when trains are re-arranged, and (considering the distances at which rail is most competitive) above all borders (which are often technological borders). There are improvements in each field, though.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Feb 4th, 2010 at 09:53:47 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 0)

Also, low penetration has something to do with the fact that it's possible to sail imports directly to harbours far closer to their destination than in most other places.

This makes the average trip shorter, which disadvantages rail over truck given the current underpricing of truck fuel.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Feb 4th, 2010 at 10:30:21 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

cites a cost of installation of 4 dollars/watt

He wrote:

The second part of the cost is everything else other than the solar panels. This cost is currently $4/watt in the $7/watt estimates I have been stating in this and other papers in this series.

That's not just installation, but inventers and cables and transport (and possibly Canadian dollars); still, it appears too high. In this comment thread from 2004, you see prices that are a fraction of 1€/Watt-peak. More current figures put the panels at still well over 50% and installation at 15%, which translates to around 0.5€/Wp.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Feb 4th, 2010 at 09:36:45 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

So we are all agreed that (possibly mandatory) solar panels for new builds and extensions (requiring planning permission) are a good investment and the only argument is over the value of retrofits as a form of counter-cyclical employment generation relative to other possibly useful counter-cyclical employment generating activities?

I think there are two separate issues here: The financial and environmental coast benefit of solar on new build rooftops vs. other forms of generation, and the social/environmental benefits of retrofits vs. other forms of stimulus spending. Since the latter target a specific subgroup of building workers - roofing specialist and electricians - there is no reason why a stimulus plan targeted at a range of sectors in recession might not include such subsidised spending as one element in the mix.

notes from no w here

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Feb 4th, 2010 at 11:58:37 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

There are currently unemployed construction workers in most EU countries.

Employing these currently unemployed construction workers is, economically speaking, free, inasmuch as it does not displace any other economic activity they might engage in.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Feb 4th, 2010 at 07:38:38 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

Thomas:

Anything and everything is, and will remain, cheaper than rooftop solar, so all subsidies for it are bad policy.
Because the cost of paying people to do rooftop work will never come down. It is possible that sufficiently cheap solar cells will someday make economic sense if you put them up during initial construction, or when a roof needs replacing in any case, but this would make for a really slow build of capacity..

and slow is what we have, but it would speed up with incentives, and no costly clean up afterwards. has it occurred to you that panels actually protect the roof? considering the 25+ years life of panels, the work needed to install them is derisory, besides we need to get a lot more creative with roof space anyway, be it for rooftop gardens, shading for leisure, water storage ect, why not suck some sun too?

retrofitting is always more costly than starting from scratch, but the faster and firmer the incentives, the more architecture will take energy on board, and the less we depend on 'big daddy' power plants, and spread the load, the better, no?

the real front line for solar development is on the 3rd world village scale anyway, not europe's cloudy north, but it started with the germans, so there you go.

where europe really needs it is the impoverished south, greece and the southern half of italy are screaming for it.

it's a no-brainer really, everyone likes them, whereas nuclear's biggest (usually not costed) externality may be the degree of brutal social control needed to convince locals that their own people will run these behemoths to the standards of the french!

italians can't even incinerate rubbish, you really want them managing nuclear waste? way to kill the tourist business, with the mob dumping it offshore in the med!

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Feb 4th, 2010 at 08:04:37 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (none / 1)

the labor inherent in redoing the roofing of most buildings, with the inherent disruption to traffic, ect, make them more expensive than any other form of power

Disruption to traffic? And roofs don't have to be maintained when no PV is installed, no satellite dishes and antennae are put up, nor new roof windows?... Come on, this is hyperbole too much.

The projected cost of the solar feed in tariff in germany

...is something established producers (who stand to lose market share) like to play around with. In particular, they like to forget about subtracting market prices.

if the same money were allocated to nuclear build, the result would be a fully carbon free grid

Because nuclear can replace intermediate power and peaker plants... not.

the same amount of money spent on "more wind and pumped storage" would also result in vastly more CO2 displacement per Euro spent

The economic point of a feed-in law is not to subsidize the cheapest and most CO2-friendly generation. It is to create a large enough separate market for competing producers of new, still expensive technologies to bring prices down by reailising economies of scale and doing research with a significant budget. Which is exactly what's happening.

Anything and everything is, and will remain, cheaper than rooftop solar

I wouldn't be so sure. Prices are coming down -- and so are feed-in tariffs due to degression. (Even if the current government leaves the current degression rate alone, the rate for 2015 installments will be half of the 2008 rate.) The industry even claims that the open market price level could be reached by 2013, which I doubt strongly, but still inmature technologies like HDR geothermal or wave power should be overtaken by then.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Feb 4th, 2010 at 08:31:00 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

The industry even claims that the open market price level could be reached by 2013, which I doubt strongly

Checking, I find the trick was to compare with retail (end-user) price, not the production price of other generators. Not entirely honest, as this comparison is applicable only for off-grid users who have some application that would use all the generated electricity, and the PV price they indicate seems to be the upper bound formed by the feed-in rate rather than the (possibly much lower) production price per kWh.

At any rate, prices are going down.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Feb 4th, 2010 at 08:52:41 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

Reflecting on the above discussion on installation costs, I note the above is final cost of installed rooftop facilities under 100 kWp (thus including installation costs and accessoirs), but excluding VAT.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Feb 4th, 2010 at 09:44:46 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

manufactured by chemical industry that leaves a, toxic as all hell, waste stream per megawatt produced

Depends where. In China, certainly.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed Feb 3rd, 2010 at 10:05:50 AM EST
[ Parent ]

Toxic solar (4.00 / 3)

I've been wondering about the toxicity of the manufacturing process, and don't have the answer, so would appreciate further info.

But siting is less of an issue, as noted above, as there are large areas that can be converted (roofs, parking lots, etc). I agree that greenfield large scale PV plants can easily become a blight on the landscape and will not go that far in Europe.

As for wind, most installation is in fields where the impact is minimal. Hilltop assembly does require some road construction, but it can usually be done to minimize impact. I don't think that's a very strong negative for wind.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Feb 3rd, 2010 at 11:02:18 AM EST
[ Parent ]

Re: Toxic solar (4.00 / 6)

Here and here are two good overviews, unfortunately, both are in German.

Cleaning of raw silicon requires hydrogen chloride. Not toxic but acidic, however, it is used in a closed circle (maybe excepting China).
The manufacture of solar cells involves a range of acidic liquids, including smaller amounts of toxic bromides and phosphorides and hydrofluoric acid. These again are used in a closed circle (but that doesn't necessarily happen outside the West, including contract work for manufacturers in the West).
The manufacture of cells also involves the toxic gas silane, and the manufacture of the latter involves silicon tetrachloride. The latter can be recycled (unfortunately with the known exception of some manufacturers in China).
The manufacture of modules involves glues.
The energy input of the manufacture is produced by the cell in 3-7 years.
The silicon in solar cells can be recycled with less energy input than that for the preparation of newly mined silcon.

Of course, there is development on all these fields. For example, manufacturers are beginning to implement pre-financed recycling (f.e. First Solar), possibly pre-empting the requirement for greenfiield solar parks applicable from this year in Germany. Using less of the acidic liquids and better recycling of these also contributed/contributes to the reduction of production costs.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed Feb 3rd, 2010 at 02:55:53 PM EST
[ Parent ]

Re: Toxic solar (4.00 / 4)

I'm surprised by the 3-7 years energy payback (though i'm not a solar expert at all.) utility-scale turbines are 9 months or so, obviously depending upon the site resource.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Wed Feb 3rd, 2010 at 03:06:37 PM EST
[ Parent ]

Re: Toxic solar (4.00 / 3)

Making the Si is energy-intensive. I suspect thought that this source (the first link) is dated: 3 years was quoted as the ballpark figure 5 years ago already, and the multi-100MW-a-year-scale factories brought energy use down.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed Feb 3rd, 2010 at 04:25:57 PM EST
[ Parent ]

Re: Toxic solar (4.00 / 2)

Huh. Checking on the site list, the article is dated 13.09.1999 -- definitely outdated.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed Feb 3rd, 2010 at 04:32:09 PM EST
[ Parent ]

Re: Toxic solar (4.00 / 3)

To highlight the development of production efficiency; First Solar claims 0.98 $/W production costs, a cut by two thirds(!) in five years.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed Feb 3rd, 2010 at 04:29:49 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

really stupid question, street light go on when the sun sets and it is dark, at whicht point in time PV doesnt produce electricity? Or are there combinations of really good batteries and low-consumption LED lighting available????

by crankykarsten (cranky (where?) gmx dot organisation) on Wed Feb 3rd, 2010 at 07:27:46 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 4)

Yes, it's in combination with batteries. But, as said, contrary to MfM's intuition, such standalone applications make up only a fraction of installed photovoltaic, most of it is grid-connected.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed Feb 3rd, 2010 at 07:31:25 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

cool, any links to such battery/light combos?

Yes, many big PV plants in Spain, when flying over them they look like lakes!!!

CSP has the advantage that with molten salt and buffers you could/can actually produce 24/7...

by crankykarsten (cranky (where?) gmx dot organisation) on Wed Feb 3rd, 2010 at 08:12:18 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 3)

[Now no more server error...]

Yes, many big PV plants in Spain

I haven't seen numbers for the distribution in Spain, but in Germany, the overwhelming majority of PV intsallations is rooftop, not free-field.

SP has the advantage that with molten salt and buffers you could/can actually produce 24/7...

That's indeed a big advantage. But, CSP is more limited geographically, and it remains to be seen whether and when it can be rolled out big-time (with multi-GW installations annually).

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed Feb 3rd, 2010 at 08:54:42 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

The Spanish ministry of Industry, Tourism, and commerce produces a set of annual electrical statistics. Looking through it I'm surprised because the capacity of most of the installations are in the MW range. Now, I don't know if this includes things on rooftops and the like.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Wed Feb 3rd, 2010 at 11:17:10 AM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

MW range, that's large free-field (private home rooftop is in the kW range, even industrial rooftop rarely exceeds 1MW). But I'm not sure that all projects are listed: if a significant percentage is rooftop, then it would be in the tens of thousands. Do you have a link?

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed Feb 3rd, 2010 at 02:01:00 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

It's all in .csv format and in Spanish.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Thu Feb 4th, 2010 at 04:59:45 PM EST
[ Parent ]

Re: LQD: Energy policy for slow learners (4.00 / 2)

[for some reason I get a server error when trying to respond to crankykarsten, so I reply here]

A short Google search turned up this, it's illustrated.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed Feb 3rd, 2010 at 08:45:47 AM EST
[ Parent ]

Spanish experience - some corrections (4.00 / 3)

First, Spain in the only country in the world where electricity production and distribution are conducted by separate entities.

No, that's the case of most European countries, by EU regulation - haven't you heard of "unbundling"? I've railed against it enough. Even France has the RTE which, while formally owned by EDF is functionally and practically totally independent.

This creates much more of a market for electricity than where the grid is controlled by producers.

And why would we want a market for electricity, again?

one of the things that the Spanish did is set up a schedule of priority for electric production.

That's one of the traditional features of FITs (feed-in tariffs) - beside the fixed price, their main characteristic is priority dispatch, ie the guarantee that renewable energy production is taken in priority to other producers. It eliminates volume risk (ie the risk that your production is not taken up and not sold). Again, not a particularly Spanish characteristic.

During December of last year, wind energy was supplying more than half of the country's electricity. Because of the law granting priority to wind energy production, the national grid stopped accepting electric production from fossil fuel based plants because there was an oversupply. It's really quite brilliant, because that solves the problem of back-up generation.

One has nothing to do with the other. Priority dispatch is relevant when a lot of wind is blowing; back-up generation is relevant when no wind is blowing. Priority dispatch does absolutely nothing to ensure that there is enough capacity in the system (one could even argue that it works against it, by ensuring that gas-fired plants run less of the time and are less profitable, thus will get built less, even though they are needed for their capacity, if not quite for their production)

Now the trick comes when you hit that baseload limit. If you have a progessive rate structure. Something like:
1-30GWh 0.10€/kwh
30-35GWh 0.12€/kwh
35-40GWh 0.14€/kwh
This is just a made up schedule. But, that means that in a given hour where 40 GWh of electricity are consumed, that the first 30 GWh bring in €3 million, the second 30-35GWH €600,000, and the last 5 GWh €700,000.

This REALLY won't work. The problem is that demand is not constant, and supplying the last bit of demand is all the harder the higher that demand is (the production unit that is turned on to satisfy the last kWh of demand at times of very high demand is only used at that moment in the whole year: if you want that unit to be built, it needs to be profitable; to be profitable while producing only a small number of kWh in the year requires such kWh to be very, very expensive, thus price peaks.

Again, if you want a heavily regulated system, a monopoly works best. If you want a market solution, use capacity payments.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Feb 1st, 2010 at 08:33:04 PM EST
[ Parent ]

Well (4.00 / 4)

In addition to Jerome on EU unbundling, a reason why the past year two of the three major Dutch electricity companies have been gobbled up by foreign companies (Nuon to Vattenfall, Essent to RWE) was largely because unbundling production from distribution made the Dutch electricity producers easy prey for take-overs.

The Dutch distribution network is, I believe, still in semi-public hands, through Tennet.

Also you might want to read Jerome's diary Even CATO libertarians say energy deregulation does not work.

by Nomad (Bjinse) on Tue Feb 2nd, 2010 at 04:38:54 AM EST
[ Parent ]

Re: Real Time Data Spanish Grid (4.00 / 3)

Brought to you by REE: real time data on Spanish demand, generation by source, CO2, Interactive graphs, option to look at days in the past... Just click on the right side box

http://www.ree.es/ingles/operacion/curvas_demanda.asp

I wish they had this for all markets...

by crankykarsten (cranky (where?) gmx dot organisation) on Wed Feb 3rd, 2010 at 06:09:04 AM EST
[ Parent ]

Hmm (4.00 / 4)

Is paying for "capacity" rather than output not socialism - developing a non-market driven energy policy when the markets were supposed to be weaving their "magic".

Actually, you could argue that this is even more radical deregulation - separating MWs completely from MWh. There is a logic to it, as capacity requirements (the size of the hose) can be argued to be different from electricity production per se (the water in the hose), but it's certainly not "socialism" - the integrated model where the monopoly manages both production capacity and actual production (for instance using Ramsay-Boiteux optimization) might be closer to that label.

In future you could say `We need a certain amount of low-carbon capacity' and generators would say how much they can provide."

This displays rather stunning ignorance - neither nuclear nor wind are very good at providing capacity on demand. The only low carbon producer that can do that on a large scale is hydro, and that's already mostly tapped out in Europe. Biomass might play that role to some extent, but it would need to be developed on a vastly bigger scale...

To put this in perspective, CO2 comprises 0.04% of the atmosphere, and the UK emits 2% of global emissions.
This moron is therefore, apparently stating that it is worth £170 billion pounds of taxpayers money to reduce the CO2 in the atmosphere by 0.008%.

... says the man who can't even calculate 0.04% x 2%...

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Feb 1st, 2010 at 08:17:25 PM EST

Re: LQD: Energy policy for slow learners (4.00 / 7)

Many thanks for the many expert contributions here. As a slow learner on this topic myself I really appreciate the input. I am currently engaging in my very own home insulation (and possible wood pellet boiler installation) project so at least I am beginning to put my money where my mouth is. (My house was "best practice" when designed and built 30 years ago, but things have moved on hugely since).

notes from no w here

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Feb 2nd, 2010 at 04:46:03 AM EST

LQD: Energy policy for slow learners | 97 comments (97 topical, 0 editorial, 0 hidden)

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