Renewable energy EU under pressure.

mheslep

Where? In the EU? In the US wind is almost 2% of electric generation.

aquitaine

We're going to find out very soon to what extent this is true. Subsidies will disappear soon as austerity continues to bite the budgets. However as long as there are government regulations requiring large percentages of the energy sources to be renewable, demand for these will continue to be artificially inflated. This is going to lead to dramatically higher electricity prices, which so far have been masked by lavish subsidies, and not for any other reason than a government policy decision. When people feel the pain, which to some degree is happening already, these nonsensical regulations will be removed by popular demand.

My prediction: In the next 10 years demand for wind and solar energy will collapse as subsidies disappear, regulations forcing inflating demand are dismantled, and as energy demand in general substantially decreases.

And there in lies the problem with renewables: They are not being rapidly deployed because of their technical and economic merit, they are because (at least in the US and UK) solar and wind have been chosen based entirely on political fiat. Basically the energy crisis is the result of political engineering and not any fundemental supply/demand issues. Besides, we're going to face this same question in 30 years when those solar panels and wind turbines all need to be replaced. Which is more sustainable, building a nuclear powerplant or a dam that lasts for more than 100 years or having to replace those things every 20-30 years?

Now as for fossil fuels, actually they are likely to get cheaper. Not because of some fantastic new source, although there are those, but rather because demand will likely plummet in the coming years as the second phase of the this "Great Recession", or whatever you want to call it, kicks in. In today's dollar terms it's entirely possible for oil to go back to

No, what we need to do is get politics out of energy so that the competing sources can compete based on just their technological and economic merits. Raise the air quality standards and streamline nuclear regulations if you must to give a completely even playing field, but ultimately governments have a very poor record of getting it right when they pick and choose winners soley for political expediency.

Besides, have you considered what the results would be if you're wrong and energy prices don't spiral beyond what they are today? Really, based on what the fundementals are and what the global economic situation is likely to be in the next few years there is no reason to believe energy prices will increase significantly for the forseeable future....short of nuclear war in the mid east of course.

And even when it does recover, barring a major political event that disrupts supply it won't instantaneously go through the roof, it's a gradual increase.



The bull goes up the stairs, the bear jumps out the window.

There's nothing wrong with R&D funding, I personally just have a problem with deployment subsidies.

At a time when government subsidies are disappearing for everything else? If solar requires that to be a major player in the grid, doesnt that just take an uneconomical source and make it more uneconomical?

Dickfore

I thought wind power production increased 20% annually. Assuming total production remained constant, and current total wind power installed was 6.3%, there should be 0.2 x 6.3% = 1.26% of total production. This is more than twice of what you quoted. The reason for the Unless total production increased from x1 to x2, so that the total installed power in this year was x = x2 - x1:
[tex]
20 \% \times 6.3 \% \times x_1 = 0.6 \% \times (x_2 - x_1)
[/tex]
[tex]
\frac{x_2 - x_1}{x_1} = \frac{0.2 \times 6.3}{0.6} = \frac{1.26}{0.6} = 2.1 = 210 \%
[/tex]

I really don't know how to reinterpret this?

Alesak

What about environmental and sustainability merits? Markets don't take into account either. I say we should spend money on renewable energy even if it's uneconomical, since there is no guarantee the markets will handle situation in a few decades when the oil starts running out.

Markets will react to depletion of resources only when it begins to happen, but imho it is too dangerous to wait for that. Why not leave some oil in the ground, just in case it's needed later?

chiro

You do realize that the energy industry is a oligopoly? Even with new energy technologies being realized or created, it doesn't change this fact.

Also with regard to depletion and market reaction, this only happens when you have true price discovery and this is not a default attribute of markets nowadays. Markets can and have been (and are done nowadays) propped up so that real price discovery is absent.

Also I'd appreciate your comment for something like biofuels. You do realize that for something like this, the actual energy density is ridiculous (might as well just jump on a modified bike pedal generator and generate energy that way), and that what is wasted is real food that could otherwise be used for its natural purpose (i.e. to eat).

Energy research is a highly tightly controlled industry, and regardless of industry, when natural price discovery mechanisms are taken away, even situations that you are talking about with regard to depletion of resources (not total depletion, but depletion) can be masked by rigging underlying market dynamics, when the capability exists to do so.

Alesak

I made a mistake, I'm sorry. It is from the opening paragraph on wikipedia.


I thought when they say "21.4% of new power capacity" they meant of wind power capacity, but upon inspecting it more closely it means that the increase in wind capacity in 2011 was about 10%. I apologize. These 21.4% seem irrelevant for the discussion here, since it probably includes construction of new power plants intended to replace old plants.

Anyway, if 93,957MW is 6.3% of the EU's electricity, 9,616MW increase of supply of wind power means about 0.6% increase in share of wind energy, assuming that total demand is rougly constant.

Alesak

It is not clear to me why electricity is better handled by private sector.

Planned production is not always a bad thing. Take, for example soviet economy. Even though in general it was quite poor nation, during WWII they managed to produce huge quantition of war machines, more than germans who had more advanced economy. It was because organizing production of only tanks and guns is technicaly doable, in contrast to producing millions of kinds of goods in peacetime economcy. I don't have online source, our teacher of economics history told us this.

So why shouldn't electricity be produced in beraucratic manner? The organization of production seems to be purely technical problem, such as predicting power consumption(probably doable, as it is almost constant), calculating costs of production and choosing what kind of power plant to build and how big share of renewable energy should be(decided by weighting in costs and non-economical benefits).

A technical department could simply say to politicians: if you want this share of renewable energy it will cost this much, and if you want this price electricity for consumers you will need to pay this much subsidies.

Before someone says it: corporate management is not always cheaper or better than beraucratic managment. For case study, see health care(EU vs USA).



I can't really comment on this, sorry. I'm not an expert.

Dickfore

I noticed the following formulation:
What does "electricity" mean? Is it total demand? Is it total production? Is it total installed capacity?

Because, if 93 957 MW is 6.3 % of "electricity", than the total "electricity" is 1.49 TW. Assuming it worked 24 h a day, 365.25 days a year, that's a yearly electric energy of [itex]13.1 \times 10^{12} \, \mathrm{kWh}[/itex]. In English-speaking countries 10¹² is called "trillion". If you go to the Economy section for EU on the CIA World Factbook, you will find these figures:
-----------------------------------------------------------------------------------------------------------
Electricity - production:

3.345 trillion kWh (2010 est.)
country comparison to the world: 3

Electricity - consumption:

3.037 trillion kWh (2009 est.)
country comparison to the world: 3

Electricity - exports:

NA kWh

Electricity - imports:

NA kWh
----------------------------------------------------------------------------------------------------------

These figures are roughly 4 times lower than what I calculated above. I guess, it means the EU's "electricity" is not working 24 hours a day, but only 6 hours a day.

This raises an important point: When you report figures for wind power, do you only report installed power capacity? From that installed capacity, how much energy is produced per year? What is the ratio of the energy produced by wind power to total produced energy by the E.U.? Also, does the E.U. satisfy its own electricity needs, or does it import?

mheslep

How many oil and gas operators do you imagine exist in just the US? Globally?

aquitaine

Ok, for one thing it's a total myth that wind and solar are sustainable because they aren't. They only have designed lifespans ranging from 25-40 years on the outset. Given the amount of land these things take up and huge quantity of material we're talking about replacing, that doesn't sound very environmentally friendly or sustainable. After all, what are you going to do with the millions of tons worth of toxic waste from pv fabrication? We have things like clean air and clean water regulations to make the market pay attention to such things in a reasonable way.

Secondly, markets are flexible, governments are not. The reason wind and solar are not economical to supply electricity to the grid is that they have no competitive advantages, even against other non carbon sources. Besides, governments have shown again and again that they are not capable of making good decisions when they try and choose technological and scientific winners and losers. The worst example of this was Japan's MITI. Prices will start rising when supply and demand mismatches occur, and the spurs the development of alternatives. The bull goes up the stairs. Besides, do I really need to point out that wind and solar are not competing with oil?

Thirdly, that "peak" is much more like a plataeu than you think. Markets don't react in quite the way you imagine, for one thing it spurs development of better drilling technologies that permit more oil to be extracted from existing wells in addition to the recovery of oil that wasn't then economical beforehand, greatly extending the "depletion time". Realistically we're about a decade away from a battery that is competitive with a gasoline engine.


EDIT:
Tanks and machine guns have no economic value at all, they are tools for political ends.

Because energy is a market, war is not.

And this is why environmentalists are often accused of being socialists, because many of them are. Here's another example of central planning gone awry.

mheslep

Yes, reports are given in peak installed power. Same for solar.

Divide by ~3 for wind, by ~6 for solar on an annual basis. The figures obviously fluctuate quite a bit by season and location.

mheslep

The electric load has an average (like everything) but it is not constant, not even close. The load is also sensitive to cost, thus efficiency of the producer matters, thus competition matters, and we're back to no you can't centrally plan the entire electrical system.

mheslep

The price of oil of course did not stay at the crash bottom of 2008.



...a critical point, because much of the N. American boom in oil production via fracking and tar sands oil would be marginally uneconomic if the price had remained at the 2008 bottom.

aquitaine

True, although it is still way down from what it was in 2007. Part of it is that the "next big economic slowdown" just hasn't occured yet. When it does we'll see prices go down again.

Yep, pushing prices up somewhat, but again not nearly up to $140 a barrel.

Astronuc

Some interesting discussion here on energy and energy independence.

http://www.livestream.com/nytenergyf...f-561f60ad4dde

T. Boone Pickens is one of the first speakers after Thomas Friedman, who is the panel moderator.

John Krenicki, president and C.E.O., GE Energy, has some interesting commentary starting at 20 minutes.

One point that is made is the intermittency of renewables, i.e., wind and solar. There are also interesting comments regarding China's approach to energy supply.

Full set of videos - http://www.nytenergyfortomorrow.com/video.php