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Why Feedin Tariffs are the wrong subsidy

by Thomas Sun Jan 8th, 2012 at 07:25:34 AM EST

The main tool used to clean up electricity generation lately has been to guarantee certain minimum price levels for power generated with specific technologies. These feedin tarrifs have varied from "not that much more than typical production costs for baseload" (wind) to "insanely high" (solar), but they have all been aimed at getting specific green generating technologies manufactured and deployed, and forcing utilities to buy the power they produce, in the hope that this would help transform electricity production into a clean, reliable grid.

There is a number of problems, however. These tarrifs have gotten quite considerable amounts of renewable capacity built, but because the tarrifs were set per technology, rather than simply being a fixed rate for any low-carbon generation, they amounted to politicians dictating technology choice. Badly. A lot of what has been built was, and will forever be, complete lunacy. Rooftop solar in northern europe is never, ever, going to make sense. Looking outside is a sufficient demonstration of this. - that could be easily fixed, of course. A "secular" tarrif uniform across technologies would not cause people to pour billions down dead ends.

The more serious problem is the investment decisions that utilities are taking due to forcible addition of intermittent generation to the grids they operate.

frontpaged with minor edits - Nomad


The end goal is a grid that is wholly low carbon, affordable, and a reliable supplier of electricity. The investment decisions taken in the current enviorment is meeting.. none of those three, because all that is getting built is gas turbines. Gas turbines can be easily turned off when the wind blows, but if this is the sole investment undertaken to accomodate intermittency then renewable electricity will be hardcapped at the point where the maximum local renewable generation exceeds local consumption. Without grid interconnections to move power away on windy days, or storage facilities to hold the power for weeks, at that point if you add more renewable capacity, you are at best throwing away electrons, at worst, you are blowing up your grid. And this happens at a point where at the very most than a third of all electricity is green. And everything else is gas.

This is a very stupid way to put a grid together. It is hideously costly, it relies on a vast import and consumption of scarce resources, it reduces greenhouse gas emissions by at most 50% compared to just going 100% coal, and oh yes, natural gas has been responsible for outright cataclysmic disasters before.
It is also exactly where we are currently heading.

The desired end point is "no coal, no gas, reliability" So the correct intervention in the market is the one that gets us there as directly as possible.
Tax coal, tax gas, use the income to build grid interconnections and offer contracts for storage facilities. - Again, without picking technologies. Simply offer a flat payment per mwh storage capability at a given efficiency.

Display:
Troll alert!

Paul Gipe
by pgipe (pgipe(at)igc.org) on Thu Jan 5th, 2012 at 09:51:42 PM EST
Disagree. Not a troll. Just a subject rarely discussed rationally.

As demonstrated often, the reasonable solution to energy problems is education of the public about conservation (negawatts). Then, when that fails (tragedy of the commons) you go to technocracy at the behest of brainless politicians.

Technocrats tend to be bloody-minded, in the sense that they aren't really trained to listen to scare stories and people who can't think straight.

The obvious answers to energy shortages is gas turbines, but they're just a stopgap. Then in the timeline comes modular nuclear. Then wind, solar pv, augmented by heavy batteries.

I agree with the thesis that taxation of consumers, especially the factories that pollute in making conspicuous consumption crap, is an effective tool. People don't care about the environment, because it's outside their timeline. Except maybe in Beijing, or Mexico City.

Before it starts, please assign a deaths per KwH value to your preferred or hated source of electricity.

Align culture with our nature. Ot else!

by ormondotvos (ormond.otvosnospamgmialcon) on Thu Jan 5th, 2012 at 10:46:33 PM EST
[ Parent ]
It's kWh, and be sure to include accuracy over the entire time-scale of one's preferences.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Fri Jan 6th, 2012 at 05:36:08 AM EST
[ Parent ]
He's making a point worth discussing.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Fri Jan 6th, 2012 at 03:05:37 AM EST
[ Parent ]
But he made the same points over and over again...

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Jan 6th, 2012 at 05:53:49 AM EST
[ Parent ]
Now in a diary. His first. Things are going well.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Fri Jan 6th, 2012 at 05:56:59 AM EST
[ Parent ]
!

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Fri Jan 6th, 2012 at 04:00:30 AM EST
[ Parent ]
Mr. Gipe is one of the key proponents for bringing feed-in regimes to North America, so please give him some rope. He'll become accustomed to playing in this sandbox over time.

Paul, it was suggested to thomas to write a diary in the nuclear power discussion in the diary on the French presidential election, and this is his version. He's not a troll.

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

by Crazy Horse on Fri Jan 6th, 2012 at 05:30:25 AM EST
[ Parent ]
SPELLING.

Align culture with our nature. Ot else!
by ormondotvos (ormond.otvosnospamgmialcon) on Thu Jan 5th, 2012 at 10:47:17 PM EST
by Jerome a Paris (etg@eurotrib.com) on Fri Jan 6th, 2012 at 03:06:49 AM EST
[ Parent ]
European Tribune - Why Feedin Tariffs are the wrong subsidy.
These tarrifs have gotten quite considerable amounts of renewable capacity built, but because the tarrifs were set per technology, rather than simply being a fixed rate for any low-carbon generation, they amounted to politicians dictating technology choice. Badly.

So you would prefer a system that promotes expansion of technology that was picked decades ago and had its development funded by public expenses then?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Jan 6th, 2012 at 03:43:50 AM EST
One reason why there are different levels of tariffs is that technologies have different levels of maturity, and higher tariffs, for a while, can help spur R&D, scale investment, and make it possible for costs to go down. A well designed system, where tariffs go down over time (like in Germany) will accompany technical progress and help those technologies mature. That's what was done with wind 25 years ago, and is happening with solar. Without the support to the initial expensive attempts, you would not have gotten today's much cheaper technology.

It's hard to get the level right, especially in fast moving sectors, but it's still worth doing, even if you get the occasional windfall to developers or, conversely, too-sharp cuts to investment.

Ground based solar projects in France will bid at tariffs below 15c/kWh in the forthcoming February tender; they were at 60c/kWh 4 years ago.


Wind power

by Jerome a Paris (etg@eurotrib.com) on Fri Jan 6th, 2012 at 03:48:14 AM EST
Exactly, and further, until externalities are properly quantified and entered into the cost equation, accuracy will have to remain compensated by political choice of technology.

Minor quibble: the first tax and tariff incentives are over 30 years old.

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

by Crazy Horse on Fri Jan 6th, 2012 at 04:02:08 AM EST
[ Parent ]

Without grid interconnections to move power away on windy days, or storage facilities to hold the power for weeks, at that point if you add more renewable capacity, you are at best throwing away electrons, at worst, you are blowing up your grid. And this happens at a point where at the very most than a third of all electricity is green. And everything else is gas.

The argument against wind which uses the problems of 100% wind penetration when we are at 5-20% today is a bit unfair. While I understand that we need to think about where we are going in the long term, we can't look at that endpoint on the basis of toddy's system - it will adapt as wind penetration increases and will be a very different animal.

Also, it is highly unlikely that we'll ever get to 100% wind alone - there will be solar, and quite a lot of biomass (which, if you look at statistics, represents a significant chunk of renewable energy generation in a lot of countries), and more than a few countries have more than a bit of hydro to play with. Between that diversity, more grid interconnection and storage (and I fully agree with you that these need to be encouraged) and the residual assets of the current systems, we'll go a long way.

And, ultimately, if you have to curtail wind now and then, it is a pity, but it's not the end of the world either, and it won't represent a material cost unless you've really messed up your system altogether.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Fri Jan 6th, 2012 at 03:55:51 AM EST
I'm always amazed that that we're continually judged as if we were advocating one or two technologies alone, as if we all stood for this hypothetical 100% penetration which was never ever in question.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Fri Jan 6th, 2012 at 04:13:01 AM EST
[ Parent ]
I'm always amazed that that we're continually judged

Aren't you personalizing this a tad? Or, who's "we"?

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Fri Jan 6th, 2012 at 05:53:16 AM EST
[ Parent ]
We meaning the global workers, supporters and proponents of various forms of renewable energy since the mesozoic.  should have said renewable energies are continually judged.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Fri Jan 6th, 2012 at 06:11:28 AM EST
[ Parent ]
This isnt a problem of 100% penetration. It is a problem that shows up at 20% - if you have enough renewables to supply a fifth of all the kwh's you consume, then when high output and low consumption coincide, 100% of your current electricity production is renewable, and all else must be shut down. This is the reason Denmark is as tied into the Norvegian and Swedish grids as it is - during wind production peaks, the bulk of the power is exported, and dams further north conserve waterhead, functioning as a pumpless "pumped storage" facility.

Hmm. Let me see if I can be perfectly clear. The vision most people here have of the future grid is one in which at least 90% of all electricity production is low carbon, and supply and demand is managed via a supergrid, storage and demand managment. This is a fair description, yes?

The problem is that the only part of that vision which is seeing RnD done and concrete poured is the generating hardware. Nobody is seriously investing in storage, nobody is working on the problem of continental scale grid interconnection. And these are not problems that can be solved quickly as they come up, - Utility scale storage means rockworks! -  and the actual consequence of building intermittent generation without the other two legs of the tripod in place is either that most of the grid load will have to be supplied by gas turbines, or that the entire project gets scubbered when people revolt against ever increasing electricity prices. Possibly both.

by Thomas on Fri Jan 6th, 2012 at 07:09:37 AM EST
[ Parent ]
Nobody is seriously investing in storage, nobody is working on the problem of continental scale grid interconnection. And these are not problems that can be solved quickly as they come up, - Utility scale storage means rockworks!

Demand-side management can be rolled out faster than supply-side management, mostly because there's so much low-hanging fruit. Ammonia synthesis for fertiliser and synthetic fuels can be shuffled around without too much hassle, and to the extent electric cars achieve meaningful penetration in the transport infrastructure you'll have a few GWh of capacity at all points except the morning and evening commutes for the cost of hooking up your chargers to the internet and writing a bit of software. There's a ceiling to how much demand flexibility you can get, but it gives enough time to start with the rockwork.

That aside, nuclear suffers from precisely the same problem, unless you propose to load balance with spinning reserves. Which you can do, in the same way you can load balance a wind-only grid by detuning turbines to varying degrees. But that's a silly way to load-balance.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Jan 6th, 2012 at 08:14:22 AM EST
[ Parent ]
And UHVDC transmission capacity can be rolled out faster than the volatile sustainable power capacity. The capacity to produce the equipment to produce the power has to be expected to be used over a period of time, so the volatile power harvesting equipment roll-out can't feasibly be, "in 5 years time we will have capacity equal to 150% of average power consumption". The roll out that equipment is going to be over several decades in any event.

But from first serious commitment to a cross-continental network of UHVDC it seems like "catching up" to latent demand for the sustainable power penetration of the day could well be done in five years, and from then on it woud be a matter of keeping up.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Jan 10th, 2012 at 02:27:12 PM EST
[ Parent ]

It is a problem that shows up at 20% - if you have enough renewables to supply a fifth of all the kwh's you consume, then when high output and low consumption coincide, 100% of your current electricity production is renewable, and all else must be shut down.

Not really - this would be true if your 20% of renewables were all from one wind farm in one location. The reality is that, as noted, you have many different renewables with different production profiles (not to mention that demand itself is not flat over the day, so "100% of average demand" is actually much less than actual demand a lot of the time) - and even within wind you have different production regimes and thus it is actually quite hard to reach 100% capacity at any time in a wind system - and the larger your sample, the harder that gets.

Now, taking into account existing hydro storage, the difference between solar and wind, the fact that offshore wind is at 40% capacity factor with a production profile closer to that of demand, and so forth, and you get a much higher threshold...

Guess what: Germany is at 20% this year, and as far as I can tell, there were no big tensions in the system...


The vision most people here have of the future grid is one in which at least 90% of all electricity production is low carbon, and supply and demand is managed via a supergrid, storage and demand managment. This is a fair description, yes?

I don't know about 90% myself, but, yes, significantly above 50% should be a target for the next 20 years (in my case, but maybe I'm a minority there, I would not mind keeping a decent chunk of nuclear as base load).
And once this is achieved, we'll have much better visibility on what needs to be done for the rest. Why make that plan today when we don't have all the info?


Nobody is seriously investing in storage, nobody is working on the problem of continental scale grid interconnection.

That's simply not true. The EU has been busily pushing for grid integration and development of pan-European networks (not just for electricity), and the wind and solar industry are the biggest promoters of initiatives like the super grid or desertec. The unbundling of networks pushed by the EU is now almost complete and one does see that independent grid operators are much less hostile to renewable than their former utility owners, who were conflicted in that respect, and grid development is certainly happening more easily when the investor the grid company) is not the main obstacle...

And one other big shoe will be moving private transport to the grid, which will have a major positive impact on the reduction of our fossil fuel consumption as well.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Fri Jan 6th, 2012 at 08:39:20 AM EST
[ Parent ]
Further, the problem doesn't show up at 20% in any significant way. In fact, the entire business model is adjusting to variable generation, even if enhanced grid buildout is going slower than planned.

Curtailment is a fact of life in energy generation. There have been periods of wind curtailment in Texas and and the Pacific northwest even with minimal penetration. Mostly due to transmission issues, but in the Bonneville Power Administration, federal regulation just ruled that BPA must not curtail to the extent they have.

Germany has also had minor curtailment periods, and while companies may wish for better efficiency within the system, it gradually changes to meet the circumstances.

We've actually come a long way from 8-10 years ago, when utilities didn't want to hook up more than a few percent, because of perceived problems which turned out not to exist.


or that the entire project gets scubbered when people revolt against ever increasing electricity prices.

Latest surveys here show that Germans willingly would pay more to support a renewable-powered grid.

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

by Crazy Horse on Fri Jan 6th, 2012 at 09:10:59 AM EST
[ Parent ]

Latest surveys here show that Germans willingly would pay more to support a renewable-powered grid.

Not to mention that wind actually lowers prices in Germany, thanks to the merit order effect.

And never mind that onshore wind is now cheaper than new built nukes, as far as can be ascertained by the cost of Flamanville... both technologies are in the 7c/kWh range cost now.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Fri Jan 6th, 2012 at 09:19:52 AM EST
[ Parent ]
Yes, but are they willing to pay increased prices for a natural gas grid? Which is where any actual increase in price is going to come from. Gas is expensive, and going to get more so - the price trend on wind goes the other way. If we fail at building enough storage and connections to phase gas out of the system, then it is a real possibility that the public will simply conclude that renewables are a stalking horse for the gas industry raping their pocket book and throw the baby out with the bathwater.
by Thomas on Fri Jan 6th, 2012 at 03:20:35 PM EST
[ Parent ]

UPDATE 1-Storms produce record UK wind power output

LONDON, Jan 6 (Reuters) - British wind power production reached a record high just before the New Year as storms hit the British Isles and powered onshore and offshore wind turbines, data showed on Friday.

(...)

The storms earlier this week also more than doubled the average load factor -- the ratio of average output over maximum capacity over a period of time -- of wind turbines to up to 66 percent on Jan. 4, compared with an average of around 30 percent, Scottish Renewables figures showed on Friday.



Wind power
by Jerome a Paris (etg@eurotrib.com) on Fri Jan 6th, 2012 at 01:49:28 PM EST
[ Parent ]
First point is that the distinct 20% is not an entire renewable energy portfolio, and its not wind from a variety of distinct wind resources, its wind from a particular wind resource.

There is, of course, nothing wrong with 100% of power coming from a single wind resource and having everything else shut down.

Indeed, consider what happens if that gets pushed above 20%. At times, energy is available to be produced but not sold because the available harvest is above total energy requirement. That's cheap power, available to neighboring countries who can build the UHVDC grid to grid transmission to go fetch it.

And we want that.

And of course as the UHVDC grid to grid electricity superhighways are built, the volatility of the energy portfolio are reduced, since they can import during slow volatile renewable power production periods as well as export during high volatile renewable power production periods.

And we want that.

So, where's the problem? It seems the critique of the feed-in tariff system is that there are other policies that also ought to be in place, and if they were in place the whole transition would go more smoothly. Its hard to see why that critique would lead to abandonment of the feed-in tariff system.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Fri Jan 6th, 2012 at 09:37:30 PM EST
[ Parent ]
I hope this isn't taken as being a silly question, for I am serious about this, but I would really like for you, or for Jérôme or Crazyhorse to point me in the direction of resources where I could learn much more about grid interconnectivity, energy storage technologies, the current state of technology, trends and forecasts for future development, in sum , good literature resources for someone who is reasonably intelligent but not an expert on the matter but who might want to become one in the medium term.

I would be much obliged, my mail is johnatlarge (arobase) gmail (dot) com.

Thank you for this discussion and the one in the french presidential primer diary Jérôme posted.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Sat Jan 7th, 2012 at 07:45:47 AM EST
[ Parent ]
I don't have a particular site I use, but i'll bet you can be off and running at Claverton Energy Group.

library pull down menu "download files" is a good place to begin.

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

by Crazy Horse on Sun Jan 8th, 2012 at 05:49:22 PM EST
[ Parent ]
Thank you!

The Hun is always either at your throat or at your feet. Winston Churchill
by r------ on Mon Jan 9th, 2012 at 04:33:06 AM EST
[ Parent ]
"Nobody is seriously investing in storage"

I would suggest that anyone with more than a passing interest in this topic might consider gaining access to the IEEE Power and Energy Society. (Probably at your local university library.) Most of the publications are behind paywalls, but at least some material can be obtained at their website http://www.ieee-pes.org/

The reason I suggest this is that the membership of this society, made up of academics and practicing engineers, is really in the best place to consider and communicate the technical aspects of power generation, distribution, and management. They don't talk about politics much, though.

Regarding storage, obviously you need something like pumped storage, which is limited by geography and environmental considerations, or lots and lots of batteries. Batteries are expensive, so how do you get people to buy them? By putting them in cars, which are a consumer product that has 100 years of demonstrated demand, an outrageously short capital replacement cycle, and a price point that is tremendously skewed from what would be considered sensible in an objective analysis. Namely, people are willing to blow tons of money on cars when they could take the bus for a lot less money.

Plug-in hybrids and electric cars are all about energy storage, and they are serious, and there is a lot of investment.

by asdf on Sat Jan 7th, 2012 at 02:54:01 PM EST
[ Parent ]
Here is a recent IEEE article about battery-based grid energy storage. It's not from the PES, but from the general interest IEEE magazine "Spectrum."
http://spectrum.ieee.org/energy/the-smarter-grid/a-battery-as-big-as-the-grid

There is debate about the reality of this particular installation, and its economics, but the point is that there is interest and activity in the area of grid storage, possibly in proportion to its value and applicability. As the penetration of renewables increases, one would expect that any appropriate compensating systems like this, or other technologies or financial incentives or whatever would also be deployed.

by asdf on Sat Jan 7th, 2012 at 11:43:14 PM EST
[ Parent ]
There is also the issue of the role of any given technology in the storage portfolio.

Running an HVDC grid to grid electricity superhighway is especially interesting when one side has substantial hydropower capacity, since that is a market that has a stockpile of quickly dispatchable power that is able to benefit from the UHVDC transmission capacity in both directions, buying power that is cheaper than the price that effectively ration the available supply of hydropower when available, and in turn being able to sell that hydropower capacity that has been freed up at a higher price.

On the side of that HVDC line where at some times the excess immediately harvested sustainable power is coming from and where at some other times the higher price bid for the hydropower capacity is coming from, there's an incentive to have at some local stored power capacity as well. If some of that local stored power is piles of biocoal by a thermal generating plant, then that seems likely to be complementary with some more quickly dispatched power store such as battery or modular hydro or whatever (eg, compressed air or compressed hydraulic power store), for the time period required between cold start and generating power, with similar production capacity but substantially less total power storage.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Jan 10th, 2012 at 02:20:38 PM EST
[ Parent ]
Also needs to be repeated again & again when Tjhomas repeats this again & again: this is a shadow debate, because (1) weather-related intermitrency of generation is not the only significant intermittency, there are also the maintenance and emergency shutdowns of thermal and nuclear plants and the diurnal variation of demand; (2) balancing is a separate question of replacing gas and high-grade coal, something neither wind & PV nor nuclear can do.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Jan 6th, 2012 at 06:00:26 AM EST
[ Parent ]
... but which dammed hydro, pumped hydro and biocoal would all seem to be able to do.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Fri Jan 6th, 2012 at 09:38:52 PM EST
[ Parent ]
As I noted inthis story, feed-in tariffs are not a subsidy, they are a different regulatory regime than spot market prices which allow for revenue stability for fixed cost (i.e. investment intensive) technologies and thus permit investment in something other than gas-fired plants.

As noted, gas-fired plants will look safer and more profitable, even if they are more expensive on average in the end (because their price will be driven over time by gas prices, but producers will just ride that wave, whereas as fixed price producer has to make a bet upon investment on where the price of gas will be over the next 20 years or more).

Additionally, fixed price technologies like wind and nuclear benefit from the merit-order effect, i.e. they tend to pull prices down when they are in production, because they replace high marginal cost producers with low marginal cost production and thus bring spot prices down (and this is actually more visible with a partial use source like wind than with a base load one like nuclear) - and that price- dampening effect can be measured and should be counted against the apparent cost of a feed-in regime.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Fri Jan 6th, 2012 at 04:01:00 AM EST
Here
As I noted inthis story, feed-in tariffs are not a subsidy, they are a different regulatory regime than spot market prices which allow for revenue stability for fixed cost (i.e. investment intensive) technologies and thus permit investment in something other than gas-fired plants.
you essentially agree with Thomas:
The main tool used to clean up electricity generation lately has been to guarantee certain minimum price levels for power generated with specific technologies. These feedin tarrifs have varied from "not that much more than typical production costs for baseload" (wind) to "insanely high" (solar), but they have all been aimed at getting specific green generating technologies manufactured and deployed, and forcing utilities to buy the power they produce, in the hope that this would help transform electricity production into a clean, reliable grid.
The key charge levelled by Thomas against feed-in tariffs is
There is a number of problems, however. These tarrifs have gotten quite considerable amounts of renewable capacity built, but because the tarrifs were set per technology, rather than simply being a fixed rate for any low-carbon generation, they amounted to politicians dictating technology choice. Badly.


tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Fri Jan 6th, 2012 at 04:21:13 AM EST
[ Parent ]
Well, yes, I don't disagree with Thomas on a number of things!

But putting it as a "minimum" price is a bit tendentious when it's a fixed price - it's also a maximum price, and the embedded option in that cap may end up being hugely valuable to the public at large in a few years time - we know how much offshore wind power from an existing plant will cost to produce in 20 years' tim, but we have no idea whatsoever what power from a gas-fired power plant will cost then. That certainty has value.

Fundamentally, feed-in tariffs match the revenue profile to the (also largely fixed) cost profile of capital-intensive technologies. As such, feed-in tariffs are also the most appropriate regime for nuclear plants - and indeed, that's where the UK government is heading towards (disguised as "contracts for differences" which just add some needless complexity which the utilities can make easy money from, and provide a fig leaf that this is not a "socialist" regulatory regime...).

As to Thomas' complaint on differentiation, I wrote about it above, and would also add that politics is about choice and there's no reason why we shouldn't favor some technologies over others for non-energy reasons (gas emissions is one reason, jobs can be another, regional development policies can be another, etc...

Wind power

by Jerome a Paris (etg@eurotrib.com) on Fri Jan 6th, 2012 at 04:34:54 AM EST
[ Parent ]
Jerome a Paris:
we know how much offshore wind power from an existing plant will cost to produce in 20 years' tim, but we have no idea whatsoever what power from a gas-fired power plant will cost then. That certainty has value.

In fact perhaps the prime objective of public policy (apart from sustainability and greenhouse gas emissions reduction) is to improve the visibility, predictability and volatility of future economic and social costs of energy - a bit like an insurance policy against unpredictable future costs. What's wrong with the state buying insurance against future price volatility?

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Jan 9th, 2012 at 08:01:12 PM EST
[ Parent ]
The fact that if they buy it by building wind farms they won't be buying it from the City of London. Duh.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jan 9th, 2012 at 10:05:10 PM EST
[ Parent ]
Thomas:

they amounted to politicians dictating technology choice. Badly. A lot of what has been built was, and will forever be, complete lunacy. Rooftop solar in northern europe is never, ever, going to make sense.

Even rooftop solar PV makes sense, if you factor in the growth of manufacturing and supply chain dynamics coming from a standing start of zero. (This is the function of variable tariff rates.)  Of course rooftop PV manufacture and installation in Greece will be one of the pillars of their recovery, with far higher efficiencies than in Hamburg.

Passive solar rooftop water heating, even in Bremen, is always in play. And if you must use the word lunacy, use it where it best applies, to a civilization which hides true cost.

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

by Crazy Horse on Fri Jan 6th, 2012 at 04:24:32 AM EST
Of course rooftop PV manufacture and installation in Greece will be one of the pillars of their recovery, with far higher efficiencies than in Hamburg.

No it won't. Austerian policies imposed by Frankfurt are destroying the Greek economy, preventing the European Investment Bank from funding projects in Greece, encouraging a capital and deposit flight out of Greece, and so on and so on. Network effects will ensure that it will be more profitable to build the manufacturing facilities in other countries that haven't had their industrial fabric destroyed by 5 or maybe 10 years of depression, and installation will likely be done by foreign conglomerates who will take any profit out of Greece, as well as sold to the locals on credit given by foreign institutions who will siphon off the interest, too. Plus a foreign firm is likely to own the Greek grid when this is said and done.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Fri Jan 6th, 2012 at 04:28:53 AM EST
[ Parent ]
that may be the neo-con plan, but we really don't know the end game yet (at least that's my view). If there's any chance of the glass being half-full, the people of Greece might still have something to say about the course of action.

Of course, the Shock Doctrine might also work, in which case we're all fucked.

Would the foreign firm owning the Greek grid defend their offices with NATO forces if the Greeks decided they wanted it back? Or if the Parliament decided to nullify the deal?

What's important to remember is the potential that PV and wind can play in Greece, if it's done sustainably and not by E.on's masters.

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

by Crazy Horse on Fri Jan 6th, 2012 at 04:37:56 AM EST
[ Parent ]
That's not the neocon plan. The serious people appear to honestly believe in expansionary austerity, except for the few Austrian liquidationists that may be around.

In addition, even if Greece does produce and install PV and wind, it will still heavily depend on liquid fuels for transportation (who's going to pay for the infrastructure necessary to switch to electric traction, and we're talking about very rugged terrain) for a long time so at most it will be exporting power and importing  or manufacturing synthetic fuels. And it will import the electric vehicles, too.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Fri Jan 6th, 2012 at 04:42:47 AM EST
[ Parent ]
Terminology is more accurate sure, but still Shock Doctrine behind the 1% wall.

I come from the school of "where there's a will, there's a way." Rugged terrain or not.

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

by Crazy Horse on Fri Jan 6th, 2012 at 05:23:48 AM EST
[ Parent ]
The serious people appear to honestly believe in expansionary austerity, except for the few Austrian liquidationists that may be around.

Has that old canard actually seen use outside the UK? On the continent I only hear TINA without even the pretence of there being a coherent story.

by generic on Fri Jan 6th, 2012 at 01:32:01 PM EST
[ Parent ]
I believe the ECB's story is that austerity build confidence which then leads to economic recovery. So in Europe it's just the confidence fairy story.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Fri Jan 6th, 2012 at 03:58:44 PM EST
[ Parent ]
Would the foreign firm owning the Greek grid defend their offices with NATO forces if the Greeks decided they wanted it back? Or if the Parliament decided to nullify the deal?

Greece is held hostage by the wish to be "part of Europe", which is rooted in the experience of being under the Colonels around 1970.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Fri Jan 6th, 2012 at 04:50:25 AM EST
[ Parent ]
Greece is held hostage by the wish to be "part of Europe", which is rooted in the experience of being under the Colonels around 1970.

Ha! Isn't this the exact same story as Spain and Portugal?  

The rapid adoption of a European identity allowed the countries to shed the appearance of authoritarianism almost overnight.

What does is mean if Europe wasn't a destination for these countries, but instead only an escape?

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 Sun Jan 8th, 2012 at 08:37:21 PM EST
[ Parent ]
Isn't this the exact same story as Spain and Portugal?

That's my assumption. Countries which are not self-conscious about their European credentials tend to make their own policy proposals rather than rolling over when Germany or France say so.

It's not homegrown authoritarianism I'm worried about, but the one being imposed from that very not-selfconscious European core.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Mon Jan 9th, 2012 at 04:23:04 AM EST
[ Parent ]
Would the foreign firm owning the Greek grid defend their offices with NATO forces if the Greeks decided they wanted it back?

Yes.

This has been another edition of "simple answers to simple questions."

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Jan 6th, 2012 at 08:07:47 AM EST
[ Parent ]
But in the long, long term cheap energy from solar is the kind of factor that can reverse the pressure gradient of migration flows. (To continue from my diary...)

The long term cost base of (for example) Bavaria just isn't good. The winters and the cost of local energy production are a problem.

by Metatone (metatone [a|t] gmail (dot) com) on Fri Jan 6th, 2012 at 04:50:59 AM EST
[ Parent ]
In the long run we're all dead, and the short run is largely a political choice.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Fri Jan 6th, 2012 at 04:56:31 AM EST
[ Parent ]
to the Wind series (along with the thread in the French elections diary which gave birth to it)

Wind power
by Jerome a Paris (etg@eurotrib.com) on Fri Jan 6th, 2012 at 04:39:08 AM EST
The new 5-year Plan in China assumes 1000 GW of wind by 2050. That's gigawatts.  Renewable press version HERE


According to another recently-issued roadmap drawn up for the country's wind power industry, China's wind power capacity will reach 200 GW, 400 GW and 1,000 GW by 2020, 2030 and 2050, respectively, making wind one of the five major sources of electricity across the country.
xxxx
"By 2050, wind power projects are expected to address 17 percent of the power demand in China," said Wang Zhongying, director, research fellow at the Center for Renewable Energy Development of the Energy Research Institute, a part of the National Development and Reform Commission (NDRC). The roadmap also predicts that around 2020, the costs of onshore wind power will be equal to those of coal power.

In particular, the roadmap suggests the following timeline:

  * Before 2020, give priority to the development of onshore wind power projects, supplemented by near-shore offshore demonstration projects;
  * From 2021 to 2030, lay equal stress on the development of onshore and near-shore wind power projects, supplemented by far-offshore demonstration projects; and
  * From 2031 to 2050, realize synchronous development of all three types of projects.



"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Fri Jan 6th, 2012 at 05:19:41 AM EST
I always take perverse pleasure in pointing out to the people who try to argue Europe is "losing" to China in terms of the wind sector, that many of the hundreds of turbines in Inner Mongolia have to shut off during peak production times in the winter because of a lack of effective planning.  Ironically, despite all the praise heaped on China  by  serious people (for low labor costs) the structure of their support for wind farms really has produced many of the defects that are lodged at European FiT programs.

Much, if not most, of China's wind farms were built with generous government  support in Inner Mongolia.  It's full of great sites, strong winds, etc.  But.......

The problem is that China has  a sort of reverse merit order effect in play because of the infrastructure in the region.  Much of the province is heated by coal fired combined heat and power plants, and there is little ability to shift power south to Guangdong and the rest of the industrial south. So what happens when the best winds come in winter is that these wind farms are idled.  Why?

Because there's no place for the power to go.  If the infrastructure existed to move the power south, no problem.   But the scope of the market is limited to Inner Mongolia by the lack of infrastructure. And in the province idling coal fired production isn't an option because that also means shutting off the heat for much of the province.  China doesn't need to develop any more capacity, there's already a bubble in that regard.  China needs to start building HVDC lines to the south, but that is unlikely to happen, because it's been the provinces and localities running the show on all of this.  

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 Sun Jan 8th, 2012 at 09:01:59 PM EST
[ Parent ]
That much of the windpower potential generation in Inner Mongolia can't yet be shipped South is true. In fact, Nation-wide, nearly 40% of installed wind capacity wasn't even grid-connected at the beginning of last year. I'm told it's just a bit better now.

But the energy plan acknowledges this, and has strong grid build planned or already underway.

The critical analysis is that while china's wind industry is huge, it is also young. Turbine performance has a real stretch before it reaches European standards. China may have "unlimited" technical and O&M support workers, but few of them have any long term experience.

Still, the infrastructure problem is already being solved, and because it's China, can be solved far quicker than anywhere else.

The prime argument on why Europe is not "losing" to China is simply the technology can't yet cut it, or if it can, there's no evidence, as there's virtually no reliable data.

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

by Crazy Horse on Mon Jan 9th, 2012 at 03:02:14 AM EST
[ Parent ]
Still, the infrastructure problem is already being solved, and because it's China, can be solved far quicker than anywhere else.

Do you have any sources for that actual construction is underway on this?

One of the issues with China is that Beijing is relatively weak compared to the provinces, although the top leadership is cycled much of the actual power remains in the hands of local CCP membership that is less mobile.

So the problem politically is that you have many local and provincial fiefdoms that essentially do their own thing.  Even in the realm of state owned enterprises, many of the most important, including as I understand it important power firms, are not owned by the center. It's own of the developmental deficiencies of the Chinese system. Beijing does big talk, but they have relatively little actual control.

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 Jan 9th, 2012 at 09:00:14 AM EST
[ Parent ]
China doing more wind is not a bad thing for Europe, it's a good thing for everybody - Chinese gas emissions go everywhere, so these need to be reduced too...

The worry, maybe, is about the supply of turbines - and the reality is that  at least 50% of the jobs in the industry are non-offshore-able O&M jobs, which by definition cannot be sent elsewhere, and a good chunk of the rest are in the manufacture and transport of heavy pieces of equipment, again something that is hard to do from very far away.

The rest is more high-tech stuff where I expect European industry to still have an edge.

And as European wind moves offshore, this is even more true. I don't see Chinese manufacturers having any chunk of the European offshore market for many years to come.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Mon Jan 9th, 2012 at 03:25:43 AM EST
[ Parent ]
a good chunk of the rest are in the manufacture and transport of heavy pieces of equipment, again something that is hard to do from very far away.

I'm inclined to agree, to a point.  The counterpoint that I'd make if trying to argue the opposite is that Gamesa is now exporting tower components from China to other locations globally, including North America. As these are arguably the heaviest single components, it puts a whole in crude version of the transportation cost argument.

But, as you say, there's also a moving division of labor at work here.  European manufacturers have the much higher value added components in the nacelle, but even here there's some indication that the Chinese are trying to use their, albeit temporary, overwhelming monopoly in rare earths to force production of some components into China with export controls.

On the whole, I'm quite optimistic about the European industry, but I also know that there are relatively simple arguments that can be made to the contrary. It's explaining the details that makes combating these a hard tasks. Serious people don't do details.  When facts get in the way of their economic theory, the facts must be wrong.

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 Jan 9th, 2012 at 09:13:26 AM EST
[ Parent ]
Transportation cost is an advantage, but, for example, even if the transportation cost advantage is sufficient to employ all existing local capacity, if the financial basis for the continued expansion of the windpower installation is not secure enough to justify investment in more capacity, demand in excess of capacity will still spill over into demand for imports.

The transportation cost advantage still has to be leveraged by effective policy that provides long term assurance of the demand for productive capacity over the financed life of the plant.

And the most effective policy for providing that assurance is a well designed feed-in tariff policy, since as installation crosses the hurdle into the range where the merit order effect is reducing the average cost of kWh, that provides added political interests in favor of keeping the policy in place.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Jan 10th, 2012 at 01:58:36 PM EST
[ Parent ]
Sweden has little wind-power, but good statistics. So I decided to check the numbers from the energy authority on if wind is less reliable then water or nuclear power.

Energimyndigheten - Energiläget

Dokument

Now, I find a handy set of data on installed windpower (MW) and delivered power (GWh) (set 23), on water and nuclear I find only delivered power (21 and 25). I assume that installed effect was roughly the same for water and nuclear  over the years 1991-2010 (water was afaik, nuclear somewhat with Barsebäck closing down and the other reactors receiving upgrades). Water is in Sweden used both as baseload and topload because we got so much (Vattenfall is Swedish for waterfall). If anyone comes across a handy set of numbers on installed nuclear and water 1991-2010 please let me know so I can improve this.

For wind I chose production/effect as it was being constructed at the time. 1991 is chosen as startyear because the production before that was so small that rounding errors in the set could disturb the outcome.

They yearly standard deviation (in percentage of the main value) then becomes:
Wind 9.5%
Water 10.8%
Nuclear 9.9%

So about the same. Can we now in the future get some reference if it is claimed that wind is more variable then nuclear?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Jan 6th, 2012 at 10:31:14 AM EST
.. wrong time scale. Neither I, nor anyone, expect significant problems with variations in annual wind output. The issue is that in order to avoid large and well correlated variations in wind output on a day to day basis, your wind power installations need to be spread out over an area significantly larger than typical weathersystems, and be scaled to move a heck of a lot of power from one end of that grid to another. Much the same argument states that grids with very small numbers of reactors in them are daft. (.. if denmark were to go nuclear, the country would need.. 3 eprs. That would not be amusing when it is refueling time)
- So much larger grids are a nessesity, no matter what we do.
For reference: http://www.metoffice.gov.uk/satpics/latest_IR.html
That is the weather pattern over europe right now. This is the size of the area that needs interconnecting to level out output. Solar-in-europe is extremely unhelpful for adressing this problem, because unlike wind, it has huge seasonal variability across the continent, which rather obviously happens at the same time, and at the time of maximum demand, to boot. Winter always comes.
Desertec makes sense. Domestic solar amounts to iceskating uphill.
by Thomas on Fri Jan 6th, 2012 at 03:14:25 PM EST
[ Parent ]
According to grid technicians from Vattenfall (speaking at a seminar I attended) the additional grid-cost for an all-wind grid in Sweden, compared to todays, is 0.2 euro-cents per KWh - a cost increase that most Swedish consumers would not notice.

I agree that larger grids are needed in general, however the problem is political not technological or economical. Today we have a margin-priced market-system that benefits gas, we also have a EU commission that thinks that the way to improve the grid is to carve up energy markets and make consumers pay more in low-producing areas. Exactly how this will result in a better grid is very unclear. I kid you not, this happened in Sweden last summer. A European grid appears to be far away.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Jan 6th, 2012 at 03:50:30 PM EST
[ Parent ]
ABB just received an €125M order for HVDC cabling from Svenska Kraftnat. This is to facilitate wind onshore and off, connection with Norway, and upgrade grid capacity particularly in the south.

Interesting that it will be underground, showing that it was deemed cost-effective to avoid opposition to overland cabling.

So it also shows some reality to funding grid enhancement.

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

by Crazy Horse on Fri Jan 6th, 2012 at 05:33:21 PM EST
[ Parent ]
Crazy Horse:
So it also shows some reality to funding grid enhancement.

I should have ranted more clearly.

The electricity cost is in Sweden divided in two seperate bills - one from the producer and one from the grid owner. Producer is chosen while grid owner depends on ownership of the actual cabels, so it is decided by where you live. Up to this summer producers had to offer the same price in all of Sweden on a somewhat competitive market. Grid prices on the other hand is fairly strictly regulated as it is a natural monopoly.

This order apparently violated some EU regulation (which is unclear, saw somewhere that the danes were discriminated, the grid has however been the most common excuse) so Sweden is from this summer divided into four price areas for producers where the price somehow (mechanism unclear) is connected to how much power is produced in the same area. The line was drawn so that northernmost and northern gets the water, middle gets the nuclear power and southern gets nothing. The result is lower prices in northernmost and higher prices in the south.

How exactly the grid will be improved because waterpower-owners in northern Sweden gets to charge more from residents in Scania remains a mystery - after all it is not the grid owners that gets paid.

Crazy Horse:

ABB just received an €125M order for HVDC cabling from Svenska Kraftnat. This is to facilitate wind onshore and off, connection with Norway, and upgrade grid capacity particularly in the south.

Interesting that it will be underground, showing that it was deemed cost-effective to avoid opposition to overland cabling.

Depending on where they are cabling underground can also be a choice to avoid trees cutting down the lines. A lot of Swedish lines are drawn through forests where there are little opposition but quite a lot of trees. Storms (as Dagmar and Emil that visited during the holidays) has a tendency to move trees upon powerlines, thereby cutting them and making that cut hard to reach through a lot of other trees being in the way.

In general the connections between the Swedish grid and neighbouring grids are improving, a new cable was recently laid over to Finland.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Sat Jan 7th, 2012 at 09:57:53 AM EST
[ Parent ]
Yes, Sweden is looking quite smart for having insisted on underground cabling, unlike Finland where most of the lines are above ground. The two storms that blew through after visiting your neck of the woods (Tapani and Hannu as they are called over here) caused approximately 60,000 folks to be without electricity for an extended period of time.
by sgr2 on Sat Jan 7th, 2012 at 01:36:57 PM EST
[ Parent ]
Yet again repeating again & again: wind also has a seasonal variability, in fact just the opposite of solar; and seasonal variability of demand is not the same in electric heating Sweden and air conditioning southern lands. (In Germany, seasonal variability is only around 10%, tendency was downwards at least a few years ago.)

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Jan 6th, 2012 at 08:08:04 PM EST
[ Parent ]
i don't feel that our leaders are really holding the public interest in mind with this move to gas, the 'kindler, gentler' fossil fuel.

it leads to our continued dependence on russia for decades, which may encourage them not to be militaristic in their old desire to own part of the med, but hemorrhages  way too much labour capital up north, for a fix that's temporary.

our glorious middlemen are making out like bandits, and unless we get really creative with biogas (a Great idea, btw), we'll have high costs transporting the stock for digestion/gasification to huge centralised plants, unless they're situated next to millions of acres of farmland, pumping out hemp/sunflowers/rape whatever.

far better to have hundreds of smaller ones, tied into local grids, and neighbourhood cooking/heating gas delivery.

it works in asia on a small farm/household level, should be scaled but nothing like the size they are now. it goes with initiatives to create a social population spread that encourages networks of many bustling 'market towns' rather than megalopoli and depopulated countryside duality, the current trend.

medium-sized is beautiful. respects and nurtures roots in region, rather than creating young people wistfully gazing at the Biggest Babylon on the Block, where  people have real lives instead of hanging out at the burger stand kicking cans out of boredom with their too-little universes out in boonyville.

the last millenium we created cities because of trade routes, wealth storage centres, cultural as well as material.

now we have wind and PV we can economically empower places with less obvious resources by having them produce electricity and selling it to the grid, (paid in chris' energy units, natch), and that can provide funds to boost attractive reasons for kids to stay where they are more and appreciate their luck.

this would do much for the social fabric so damaged by atomisation and the 'mobile' society, and enhance family solidarity. with today's communication media we can stay abreast of the world even remotely, and the young will feel less disenchanted with the few options there are now for youth employment in the sticks, where machinery has relieved people of the need to spend so much time in the fields, and the least valued chores have been taken over to a large degree by immigrant labour.

this leads to a lot of drug use in under-challenged, under-inspired. under-employed young people, and that also opens them up to hard right rhetoric and other testosteroney aberrations.

and the immigrants often don't make enough to really join the host society, especially after sending home money to their relatives back home.

so now we have chem farming killing wildlife, poisoning aquifers, rivers and streams, toxifying the topsoil, and workers and grants from the EU to keep growing tobacco in our local best valleybottom land, and buying green beans from israel or chile...

it's a sophisticated puzzle, and right now it seems put together all upside-in.

/rant

'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 Fri Jan 6th, 2012 at 10:35:48 AM EST
Tax coal, tax gas,

Agree. Taxing pollution is a simple way and perhaps politically most "stable."

..use the income to build grid interconnections

Why earmark taxes?


..and offer contracts for storage facilities.

Why should public build these?


- Again, without picking technologies.

Government has actually a good history in R&D. IMO favorable technologies should be supported with the help of public money in R&D, but not by micromanaging the market place.


Simply offer a flat payment per mwh storage capability at a given efficiency.

How do you calculate efficiency?

by kjr63 on Fri Jan 6th, 2012 at 11:23:20 AM EST
Why earmark taxes?

because otherwise it'll disappear as tax cuts for a small sector of the community?

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Fri Jan 6th, 2012 at 11:32:50 AM EST
[ Parent ]
Actually, that was not what I was thinking. Mostly I was thinking that the entire point of this tax is that it should eliminate itself - The income base beneath it disappears as utilities stop using coal and gas, and if it is part of general revenue that creates incentives for government to keep coal and gas in use- if it is being used to build the replacement infrastructure for the coal and gas plants this is not a concern - the need for the income disappears along with the income stream.
by Thomas on Fri Jan 6th, 2012 at 02:53:02 PM EST
[ Parent ]
Two other points that need to be considered in parallel with feed-in tariffs are
  • Existing subsidies for fossil fuel. It's fine to complain about feed-in tariffs, but to be fair, one should spend time arguing agains the existing setup in proportion to the money involved.
  • Conservation. Demand per person needs to fall. The West in general spends way too much energy due to lousy residential construction, poorly managed transportation, expectations that houses will always be maintained at 21 degrees 52 weeks a year, etc.
by asdf on Sat Jan 7th, 2012 at 02:59:57 PM EST
Eh, okay, this is going to have to become a seperate diary because I have quite a lot to say on this. But letting prices on electricity go up, and planning for a future with overall lower electricity consumption is very climate unfriendly, because it neglegts that electricity is currently not the bulk of our carbon emissions, and all sensible plans for dealing with all the rest involve moving energy uses onto the grid.
by Thomas on Sun Jan 8th, 2012 at 04:21:21 PM EST
[ Parent ]
But why would increasing reliance on power generated and sold to the utility at a capped price increase electricity prices?

After all, a major factor in the discrimination in favor of natural gas generating capacity is that the generating capacity in question can be profitable at lower capacity utilization rates. Its accommodation to a smaller share of power being generated by fossil fuels.

For electric rail, both freight and passenger, a substantial part of the operating cost benefit of electric power is greater efficiency ~ even at similar cost per unit of energy, they would be less expensive to operate than liquid fueled cars and trucks.

And its hard to see how electric cars would be biased to using power during periods when a substantial share of natural gas fired power is required as balancing load.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun Jan 8th, 2012 at 06:22:25 PM EST
[ Parent ]


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