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News Renewable energy EU under pressure.

  1. May 21, 2012 #1
    The Frankfurter Algemeiner (something like the Times, but then in another country) has a rather important article here..

    It seems that an internal EU strategy paper has leaked, in which it is proposed to stop green energy support as it becomes prohibitive expensive.

    One may wonder if this had to do with the sacking of a green energy minister in Germany the other week.

    Of course it is known that things were not going that well for a while, see here, slide 6.

    The http://www.renewable-energy-industry.com/stocks/index.php?changeLang=en_GB [Broken] doesn't show current rating for me. So I wonder what is going on. Comments anybody?
     
    Last edited by a moderator: May 6, 2017
  2. jcsd
  3. May 21, 2012 #2

    Ryan_m_b

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    I don't think there is too much cause for alarm. This is very similar to what happened in the UK at the start of the year, for the past several years domestic solar power has been subsidised by the government. The special tariff was due to end in March this year anyway but the government out of the blue decided to stop it in January causing mass cancellations of orders and many companies having to downsize their workforce and some go bankrupt. The way they handled the situation was utterly deplorable. The reason (and I think it is the same reason we are seeing here if I read the FA article correctly) was more understandable. Technological advances in recent years have massively brought down the cost of solar panels, IIRC the current cost for a domestic panel is 25% of what it was in 2008 and the price halved from January 2011 to December 2011. This meant there was something of a gold rush on panel installation*. Consequently the government started massively overspending via their special tariff (read: haemorrhaging tax payer money) because when the subsidy was thought of over five years ago no one predicted this and so they panicked.

    I think that is what we are seeing here, as the technology for renewable energy gets cheaper it becomes more costly to fund it because its adoption increases. Subsidising a tiny fraction of the population in order to build incentive in an industry important to the future is fine, subsidising a significant fraction is an unjustifiable expense. The subsidies were never meant to be forever, they were only meant to incentivise the public to spend and the industry to invest. So it's not all bad because hopefully the reason green energy is becoming prohibitively expensive to support is because the technology is cheap enough to begin wide spread public adoption.

    Having said all that we're walking into an energy crisis in Europe. Anti-nuclear lobbies have been very successful in recent years in the UK, Germany and Italy and our supplies of fossil fuels aren't getting any cheaper. We need massive funding and deployment of non-fossil fuel energy sources now and continuing over the next few decades. We can't afford to wait until peak oil/gas/coal and have to radically build new energy infrastructure whilst dealing with a system where energy costs spiral. To that end I sincerely hope that the money saved from reducing/stopping subsidies for current gen green technologies is put towards the next gen like better battery technology for electric vehicles (and the corresponding infrastructure) or funding for artificial photosynthesis development.

    *Anecdote but three years ago I didn't know of any building with solar panels, now even in the sleepy Noweheresville town I currently live in there are about five houses within a mile that have a solar panelled roof. If I extend that to a few miles the number jumps. It seems like we're on track (fingers crossed!) for significant solar panel installation in the UK. Next we need to figure out good ways of storing it, government subsidised home batteries anyone?
     
    Last edited: May 21, 2012
  4. May 21, 2012 #3

    mheslep

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    There appear to be several *different* issues at hand:
    The cost of renewable energy per unit has dropped substantially as the article says, though the volume of installation has grown rapidly and hence the subsidy costs. The EU is in financial difficulty, so it has to cut back on something, sounds like energy subsidies will one them.

    Article states that was likely due to a political gaff, and unrelated to the above.

    Which is about the grossly overpopulated renewable energy sector. This is related to the top subject, but is mainly about the suppliers and not the consumers. Time to thin the heard.
     
    Last edited by a moderator: May 6, 2017
  5. Jun 14, 2012 #4
    Recently I've been reading on wikipedia about this topic and it seems highly optimistic. In 2011 wind energy supplied 6.3% of total energy in the EU and the growth is exponential for now, with about 20% increase per year. If the trend kept going like this, in 15 years EU will be powered completely by renewable energy. But yeah, I seriously doubt it will...

    http://en.wikipedia.org/wiki/Wind_power_in_the_European_Union
     
  6. Jun 14, 2012 #5

    Ryan_m_b

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    I do think the outlook is good (though it could be far better if changes were made earlier and we weren't fighting so much inertia) but I doubt the growth we're seeing will continue unabated. Mainly because even if wind was built on a mass scale we'll fill up all the suitable places quickly and then face diminishing returns.
     
  7. Jun 14, 2012 #6

    mheslep

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    I doubt Europe will fill up the suitable *offshore* wind places anytime soon.
     
  8. Jun 15, 2012 #7
    Is it really inertia? Maybe this article suggest that some thinking is involved, if it's about solving real and perceived problems.
     
  9. Jun 15, 2012 #8
    ...says "conservative think tank", that receives donations from BP. It's not really surprising that they recommend that "government should scrap 4GW of its planned 13GW target for offshore wind generation by 2020", then.



    See for example this book for discussion about think-tanks.
     
  10. Jun 15, 2012 #9
    You realize that there is no logic in your argument. It is called an argumentum ad hominem.
     
  11. Jun 15, 2012 #10

    Ryan_m_b

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    Just because an argument is an ad hominem doesnt mean it's an ad hominem fallacy. Pointing out conflicting interests in the person making an argument is a good way to highlight that the argument isn't credible, it's not the final say at all but it is an indicator upon which we should build by reading into the actual argument.

    Surfice to say we should consider the report itself. Personally I agree with propositions like this where meeting targets is considered in a broader sense however a big problem IMO is that these measures are only to meet short term targets. We need to consider the longer term, therefore a more complete proposal would look at what to do with those stations over the following 20 years. As an aside another problem with this proposal is that it would have to ensure that the money saved was actually spent in the manner described and take into account what happens if in several years time a new government axes the insulation plan but keeps money saving through gas stations.

    Also I think that the target should be removing fossil fuel dependancy over all as well as reducing CO2 emissions. Mainly because we have to do everything we can to mitigate the struggle for transition from a fossil fuel energy system to a non-fossil fuel system as peak oil/gas/coal loom.
     
  12. Jun 15, 2012 #11
    I beg to differ, what if your local deity states that water boils at 90 degrees celsius, while your local folk devil thinktank says that it boils at 100 degrees, what do their backgrounds say about who is the most right?

    Actually, pointing out that they are scapegoats, is probably saying more about the initiator than their victims.

    You may want to compare this process with groupthink

    Indeed, they presented a report with numbers which should be scrutinized just like all the feasibility studies about renewables. It's not the messenger but the messenge.

    Honi soit qui mal y pense.
     
  13. Jun 15, 2012 #12

    Ryan_m_b

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    I really can't be bothered to go down this route because it is mostly pointless. But just to be a pedant that analogy doesn't hold because the religious principles of the think group do not relate to the subject matter. A more apt analogy maybe how would you feel about a think tank report on the heath effects of smoking from a tobacco company? You would take it with a larger pinch of salt than you would from a collection of respiratory doctors.

    Either way it's a detraction because ultimately we are not going to limit ourselves to whether or not we trust the report but on what it actually says.
     
  14. Jun 15, 2012 #13

    chiro

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    As with most things, we often are forced to resort to uncertainty. As a result we have to use the best tools in our arsenal to figure out whether something has any ounce of truth (many people think in terms of truth/no truth, but rarely have I ever seen anything that is that simple).

    One tool though that is very effective is to look at incentive. Intent is ultimately the best way to judge things but unfortunately (and ironically fortunately), we don't get access to this.

    The second best thing is then looking at inference for incentive. Money is a good inferential indicator. Granted it is not the only indicator and sure you can say "correlation does not equal causation", but even with that said in a world of uncertainty and with a world where true intent is rarely easy to decipher, money trails, fund networks, people networks and these combined help build a case for incentive and indirectly, intent.
     
  15. Jun 15, 2012 #14
    Which is known as guilt by association

    Maybe just maybe these members of think tanks have children and grandchildren like https://www.physicsforums.com/showpost.php?p=3957593&postcount=15825 [Broken] (also guilt by association :smile: ) and maybe they want nothing more than a bright future for all of them, even if it's the last thing that they do. It just so happens that they don't believe in the future that others have thought out.

    And maybe that's why they are declared folk devils, being the out group.
     
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  16. Jun 15, 2012 #15
    Well that is a highly optimistic number. One number you report is the relative input of wind from the total current production (the 6.3%). Another is the sole increase in wind production (20%). But, you must bear in mind that there is increase in total production as well. Let us say that the total consumption growth rate is g per cent. Then, at a later date, the relative input of wind power is:
    [tex]
    6.3 \% \left( \frac{1.2}{1+g/100} \right)^{T}
    [/tex]
    It rises only if [itex]g < 20%[/itex].
     
  17. Jun 15, 2012 #16
    You are totaly right, I forgot about increasing energy consumption. However, see this. It says that over the last 20 years or so the EU27 energy consumption was nearly constant, which makes sense really. But it probably won't show this year, as major wind farm are still under construction.

    Also, for those interested, last year the installed wind power was about 0.6% of total production.
     
  18. Jun 15, 2012 #17
    Right, I owe you an elaborate response to those. But it has to wait until tomorrow. :zzz:
     
  19. Jun 15, 2012 #18

    mheslep

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    Where? In the EU? In the US wind is almost 2% of electric generation.
     
    Last edited: Jun 15, 2012
  20. Jun 15, 2012 #19
    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.

    Price_of_oil_(2003-2008).png

    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?
     
  21. Jun 15, 2012 #20
    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?
     
  22. Jun 16, 2012 #21
    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?
     
  23. Jun 16, 2012 #22

    chiro

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    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.
     
  24. Jun 16, 2012 #23

    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.
     
  25. Jun 16, 2012 #24
    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.
     
  26. Jun 16, 2012 #25
    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?
     
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