Blowout Week 149

The big news this week comes from Europe, where the European Commission is seriously considering canceling after 2020 the grid dispatch priority that renewable energy has up to now enjoyed. If implemented, as it seems it will be, this change could have a major impact on future renewables growth in Europe and on the EU’s ability to meet its emissions targets:

Guardian:  Renewables could lose European power grid priority, documents reveal

Windfarms and solar power could soon lose the privilege of getting priority over other energy sources on European electricity grids, leaked documents show.

Paring back the “priority dispatch” system could increase carbon emissions by up to 10%, according to a confidential EU impact assessment seen by the Guardian. But the document goes on to model four scenarios for doing just that, in a bid to make Europe’s energy generators more flexible and cost-competitive. Some industry sources have told the Guardian they are alarmed and think it highly likely that priority dispatch for clean energy will be scrapped from the EU’s renewable energy directive, which is currently being redrafted for the post-2020 period. Senior industry sources say they will push for financial compensation and access to balancing markets to help prevent a significant industry contraction, if priority dispatch is ended. Fossil fuel power providers argue that renewables have the lowest operating costs and so would anyway receive priority access to the grid network. They also say that taking the clean energy sector out of priority dispatch would prevent “negative prices” – where more energy is produced than can be sold – and eliminate anti-competitive subsidies. The EU’s assessment views the abolishing of priority dispatch as a step towards the creation of a “level playing field” for energy generators. But without such a system, renewable sources may be the most likely to be taken offline because of the relative ease of switching off a wind turbine compared to a coal or nuclear plant. The energy source with the lowest marginal cost – almost always renewables – is usually the first in line to be shut down by power grid operators.

We follow up with another take on the EU grid priority issue and move on to the hoopla surrounding the ratification of the Paris Accord and its dismal prospects of success, the Saudi-Iran oil production cut squabble, oil & gas jobs on the point of recovery, the recent North Sea oil & gas leasing round, fracking bans, nuclear in US being replaced with gas and coal, French nuclear plant outages, China still building two coal plants a week, Finland to ban coal by 2030 while the EU finances new coal plants in Greece, EU to bolster its failing Emissions Trading System, the UK’s failing solar industry and how it was not to blame for the renewables overspend, whether  Whitehall is deliberately sabotaging Scottish renewables and NatGrid plays fast and loose with public money.

PR Newswire:  European Commission About to Axe Renewables Extension

According to an article published in the Guardian Newspaper on 1 November, the European Commission’s Directorate-General for Energy is preparing an amendment to the Renewable Energy Directive, which will pare back the “priority dispatch” – a system which prioritises solar and wind energy being fed into the power grid over other energy sources such as coal or nuclear electricity. “The priority dispatch is a central pillar of the energy revolution. If this priority were to be scrapped, coal and nuclear power could block the grid and access of solar and wind power. By prioritising fossil fuel power plants, we will lose any possibility of achieving climate goals in Europe and globally,” points out Milan Nitzschke President of EU ProSun, a joint initiative of the European solar manufacturing industry, which promotes sustainable solar energy production. German Vice-Chancellor, Sigmar Gabriel, has expressed his strong opposition to the European Commission recently, stating it is important for Europe to maintain the priority dispatch for renewable energies. “Investment in Renewables like Solar will be significantly damaged if investors cannot be certain that they can feed or sell generated electricity to the power grid. Furthermore, it will undermine incentives for the traditional energy industry to invest in making their power plants more flexible and eliminate investment interest in renewable energies. This will also result in the urgently needed European grid expansion slowing down,” said Nitzschke. “The EU is effectively axing its energy and climate goals by choosing to cut the priority dispatch for renewable energies,” concluded Nitzschke.  The historic Paris climate change agreement just became international law

A worldwide pact to battle global warming entered into force Friday, just a week before nations reassemble to discuss how to make good on their promises to cut planet-warming greenhouse gases. Dubbed the Paris Agreement, it is the first-ever deal binding all the world’s nations, rich and poor, to a commitment to cap global warming caused mainly by the burning of coal, oil and gas. “A historic day for the planet,” said the office of President Francois Hollande of France, host to the 2015 negotiations that yielded the breakthrough pact. “Humanity will look back on November 4, 2016, as the day that countries of the world shut the door on inevitable climate disaster,” UN climate chief Patricia Espinosa and Moroccan Foreign Minister Salaheddine Mezouar said in a joint statement. Mezouar will preside over the UN meeting opening in Marrakesh on Monday. “It is also a moment to look ahead with sober assessment and renewed will over the task ahead,” they said. This meant drastically and urgently cutting emissions, which requires political commitment and considerable financial investment. The historic agreement was finally endorsed in the French capital last December, after years of complex and divisive negotiations, but the ratification was reached with record speed. At least 55 parties to the UN’s climate convention (UNFCCC), responsible for at least 55 percent of global greenhouse gas emissions, had to ratify it for it to take effect. It passed the threshold last month, and by Friday it had been ratified by 97 of the 197 UNFCCC parties, representing 67.5 precent of emissions, according to France’s environment minister Segolene Royal, outgoing president of the UN talks.

New York Times:  Huge Emissions Cuts Needed to Meet Paris Climate Goals

The world is nowhere near on track to achieve the ambitious temperature goals adopted in the landmark Paris Agreement on climate change, the U.N. said Thursday in a sobering report that warned of a human tragedy unless governments stepped up efforts to fight global warming. The U.N. Environment Program said the world needs to slash its annual greenhouse gas emissions by an additional 12 billion-14 billion metric tons by 2030 to have a chance of limiting global warming to 2 degrees Celsius (3.6 degrees Fahrenheit). That’s the temperature goal that countries agreed to in the Paris pact, which takes effect Friday after countries ratified it much faster than anticipated. “The science shows that we need to move much faster,” said UNEP leader Erik Solheim. “The growing numbers of climate refugees hit by hunger, poverty, illness and conflict will be a constant reminder of our failure to deliver.” Solheim said increased efforts by governments need to start with the U.N. climate conference being held over the coming two weeks in Marrakech, Morocco. The 2-degree target is relative to before the industrial revolution, when scientists say humans started altering the climate system by releasing greenhouse gases into the atmosphere, primarily carbon dioxide from fossil fuels. Temperatures have already gone up by about 1 degree C since then.

New York Times:  The Paris Agreement on Climate Change Is Official. Now What?

Now comes the hard work: figuring out the details. Many companies have not even figured out yet how much greenhouse gas they emit, much less made plans to curb these emissions. The financial framework, namely a carbon price or tax that would force industries to pay for the pollution they spew, has barely started to emerge. And while tens of billions of dollars of green bonds have been issued to finance environmental projects, these are a pittance compared to the sums required to make a difference. “It’s not a question of billions, it’s a question of trillions,” said Ángel Gurría, the secretary general of the Organization for Economic Cooperation and Development. The Paris Agreement, reached in December among 195 countries, was never imagined as the silver bullet for global warming. Rather, the goal of the agreement was to stave off the most devastating effects of climate change by limiting the increase in global temperatures to two degrees Celsius, and to just 1.5 degrees Celsius if possible. But even that may prove problematic. If every country fully accomplishes its initial pledges, the increase would be closer to 2.7 degrees, according Fatih Birol, executive director of the International Energy Agency. From a market perspective, many companies do not yet have a strong financial imperative to make sweeping changes to address climate change. Fledgling exchanges for trading carbon emissions rights have attracted limited interest. And the prices on those markets are well below the $100 a ton or more that experts say would force companies to limit their emissions of greenhouse gases. The market for carbon emissions has actually weakened in the months since the deal was approved. “It has gone from $9 after the agreement to $6 — it shows us the market impact of the Paris Agreement has not been as strong as we all think,” Mr. Birol said.

CNBC:  Saudis threaten to raise oil output again

Old disputes between Saudi Arabia and rival Iran resurfaced at a meeting of OPEC experts last week, with Riyadh threatening to raise oil output steeply to bring prices down if Tehran refuses to limit its supply, OPEC sources say. Clashes between the two OPEC heavyweights, which are fighting proxy wars in Syria and Yemen, have become frequent in recent years. Tensions subsided, however, in recent months after Saudi Arabia agreed to support a global oil supply limiting pact, thus raising the prospect that the Organization of the Petroleum Exporting Countries would take steps to boost oil prices. But a meeting of OPEC experts last week, designed to work out details of cuts for the next OPEC ministerial gathering on Nov. 30, saw Saudis and Iranian clashing again, according to four OPEC sources who were present at the meeting and spoke to Reuters on condition of anonymity. “The Saudis have threatened to raise their production to 11 million barrels per day and even 12 million bpd, bringing oil prices down, and to withdraw from the meeting,” one OPEC source who attended the meeting told Reuters. OPEC headquarters declined to comment on discussions during the closed-door meetings last week. Saudi and Iranian OPEC delegates also declined official comments.

Bloomberg:  Top OPEC Official Says Saudis Didn’t Make Oil Output Threat

Saudi Arabia didn’t threaten to increase its oil production if other OPEC members wouldn’t agree to make cuts, said the group’s top official. “Their contributions as usual were constructive” at talks with other members of the Organization of Petroleum Exporting Countries in Vienna last week, Mohammed Barkindo said Friday. “After Barkindo’s comments there’s less concern that we will sink into an all-out price war,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “The closer we get to an actual decision on production cuts, the more nervous the market will get.” Oil has retreated below $45 a barrel this week for the first time since September, a decline triggered by the failure in Vienna to finalize the Algiers deal. While Goldman Sachs Group Inc. sees little probability of an agreement later this month, Bank of America Merrill Lynch and Citigroup Inc. say an accord is likely.

CNBC:  Oil and gas job losses may have gotten as bad as they’ll get

The deep job cuts in America’s oil patch may at last be healing over. For the fourth month running, data from the Labor Department show employment in oil and gas extraction holding roughly steady, after declining throughout 2015 and the first part of this year. The figures, released Friday as part of the nonfarm payroll report, show a downward slope that’s finally flattening. Since July, employment has held at about 172,000 positions in the sector, which includes higher-paying geoscientists and petroleum engineers as well as lower-skilled roustabouts and roughnecks who work the rigs in oil fields. It’s important to note that more comprehensive data from the Census Bureau have not yet confirmed the bottom that’s being shown in the Labor Department numbers. The Census data are based on census reports from all U.S. business establishments, so they capture a more complete picture than Labor’s figures, which are based on a survey of a smaller number of companies. That’s why there’s a gap between Census and Labor data.

Reuters:  U.S. drillers extend rig recovery into sixth month

U.S. oil drillers increased rigs this week for a 20th week in the last 23, as energy firms follow through on plans to add rigs made months ago when crude was still trading over the key $50 a barrel level analysts said should lead to more drilling. Drillers added nine oil rigs in the week to Nov. 4, bringing the total count up to 450, the most since February, but still below the 572 rigs seen a year ago, energy services firm Baker Hughes Inc said on Friday. Since crude topped $50 a barrel in May, June and October, drillers have added 134 oil rigs, its biggest recovery in over two years since prices collapsed due to a global oil glut. Eighty-one rigs or about two-thirds of the rigs added since May were in the Permian basin in west Texas and eastern New Mexico, bringing the total there up to 218, the most since November 2015. With oil prices still expected to rise in 2017 and 2018 with a projected tightening of the supply-demand balance,analysts forecast energy firms will follow through on plans to boost spending on new drilling in coming years.

Bangkok Post:   Oil and gas majors invest $1 billion in low-emission tech

Ten global oil and gas companies on Friday announced they will invest $1 billion in low-carbon-emission technologies to help combat climate change. BG Group, BP, Eni, Pemex, Repsol, Saudi Aramco, Reliance Industries, Royal Dutch Shell, Statoil and Total — who account for almost a fifth of the world’s oil production — will fund the project through the Oil and Gas Climate Initiative (OGCI), they said in a statement. “We are on the look-out for potentially game-changing technologies that could have a long-term impact on greenhouse gas reduction,” said the group. “To help us meet our ambition, we are launching OGCI Climate Investments, a partnership that will enable us to invest $1 billion over the coming years to support start-ups and help develop and demonstrate innovative technologies that have the potential to reduce greenhouse gas emissions significantly”.The fund will focus on reducing methane emissions, carbon capture and improving industrial and transport efficiency.

BBC:  North Sea oil and gas licensing round ‘strong’

The oil and gas industry has responded “strongly” to the latest offshore licensing round. It was focused on under-explored areas of the UK continental shelf (UKCS) – the first so-called Frontier licensing round in more than 20 years. The Oil and Gas Authority (OGA) said 29 applications had been received from 24 companies. OGA chief executive Andy Samuel said: “Despite the difficult climate, industry has responded strongly.” He explained: “This confirms the high remaining potential in the UKCS frontier areas. Long-standing investors continue to seek new acreage and we also welcome the arrival of new entrants.” The upcoming round will cover mature areas of the UKCS.

Reuters:  Interest in latest UK oil exploration tender lowest in 14 years

Britain’s latest tender for offshore exploration permits attracted the lowest interest in 14 years, underlining how the mature North Sea is struggling to entice explorers to extract the 20 billion barrels of oil equivalent left untapped. The 29th round for offshore licences, which included unexplored areas around the Shetlands, received only 29 applications for 113 blocks, compared with 1,261 blocks on offer, Britain’s Oil and Gas Authority (OGA) said on Monday. “Long standing investors continue to seek new acreage and we also welcome the arrival of new entrants,” OGA Chief Executive Andy Samuel said in a statement. A total of 24 companies submitted applications, including multinationals and first-time applicants, the OGA said. The total of applications received was the lowest since 2002, however, when just 289 blocks were on offer.

Wall Street Journal:  Can Fracking Bans Succeed in Oil and Gas Country?

The movement to ban fracking is winning victories across the U.S. Yet the campaign has largely failed to win where it matters most—in places oil and natural gas are produced. A Nov. 8 ballot measure will test that pattern in Monterey County, famed for its farms and scenic coastline. Measure Z, an initiative on Monterey County’s ballot, seeks to ban fracking and new wells, and to restrict how oil companies use water byproducts. Of hundreds of anti-fracking and similar measures across the country, almost all are where there is little or no oil or gas production. New York banned fracking in 2014 but doesn’t have a sizable oil industry, though that move did head off any potential growth of the sector there. Vermont banned fracking in 2012 but has no commercial natural gas or oil resources. Where fossil fuels are produced in any significant quantity by any method, such measures have generally failed. In Colorado, activists couldn’t gather enough signatures to get two anti-fracking measures on the ballot this year. Voters in Denton, Texas, passed a binding measure against fracking, but the state quickly passed a law banning local bans. Among the legally binding bans passed in Pennsylvania over the past few years, none are in areas where companies are producing in the Marcellus Shale natural-gas formation in any large quantity, according to a Wall Street Journal analysis of government data of active wells and a tally of bans compiled by anti-fracking group Food and Water Watch.

Orange County Register:  Oil’s plunge dents prospects for Scottish independence

Cheap oil prices are making it uneconomical to produce oil and gas from the North Sea, so investment is postponed or canceled, and rigs are shutting down or being transported elsewhere. And the drop in production from the mature field has meant a steep drop in tax revenue for Scotland, which has put a big question mark over the prospects of Scottish independence from the United Kingdom. First Minister Nicola Sturgeon of Scotland, the leader of the governing Scottish National Party, is committed to independence. After Britain voted in June to leave the European Union, while Scotland voted heavily to remain, she said a second independence referendum was “highly likely.” But in fact, it seems far away. Sturgeon cannot afford to lose a second referendum, and although Scots feel adrift from a Conservative-ruled Britain, the economic situation has deteriorated badly. And that is largely because of the collapse in the price of oil, which has not only reduced revenue but also made new exploration simply too costly.

Vox:  The US keeps shutting down nuclear power plants and replacing them with coal or gas

Since 2013, the United States has lost five nuclear power plants, retired before the end of their natural lifespan for economic reasons: Crystal River in Florida, Kewaunee in Wisconsin, San Onofre in California, Vermont Yankee, and, just at the end of October, Fort Calhoun in Nebraska. They’ve generally fallen victim to cheap natural gas, unfavorable market policies, and/or local opposition. That’s a huge chunk of emissions-free power — gone. Those five plants alone produced nearly as much electricity as all of America’s solar panels last year. That’s not a knock on solar at all; it just shows the scale of what’s being lost here. And, according to a new analysis by the Energy Information Administration, when those reactors get retired, utilities usually end up replacing the lost electricity by burning more coal or natural gas. We’re basically taking a step backward on climate change. The details behind each reactor closure differ. Crystal River needed billion-dollar repairs to its containment wall that didn’t make financial sense for its owner when electricity prices were so low due to cheap natural gas. San Onofre also needed costly repairs and probably could’ve survived if it had been allowed to operate at part-capacity, but regulatory delays made it unprofitable for the utility to keep the plant open. But the big picture is pretty simple. There are lots of reactors around the country that are already built and technically capable of providing carbon-free electricity for years to come, but are getting crushed by circumstance. Unless we decide to change energy policies so as to properly value nuclear’s carbon-free contribution those plants will keep vanishing, largely replaced by fossil fuels.

Power Magazine:  France’s Nuclear Storm: Many Power Plants Down Due to Quality Concerns

With over half of France’s 58 reactors possibly affected by “carbon segregation,” the nation’s nuclear watchdog, the Autorité de Sûreté Nucléaire (ASN) has ordered that preventative measures be taken immediately to ensure public safety. As this story goes into production in late October, ASN has confirmed that 20 reactors are currently offline and potentially more will shut down in coming weeks. The massive outages are draining power from all over Europe. Worse, new questions continue to swirl about both the safety and integrity of Électricité de France SA’s (EDF’s) nuclear fleet, as well as the quality of some French- and Japanese-made components that EDF is using in various high-profile nuclear projects around the world. EDF’s nuclear power plants (NPPs) provide up to 75% of France’s power needs. Earlier in October, EDF reduced its 2016 generation targets from 395–400 TWh to 380–390 TWh, while estimates for nuclear output in 2017 have also been lowered to between 390 TWh and 400 TWh. Although in 2009 output fell to 390 TWh, for the last decade production has consistently been above 400 TWh and exceeded the target range of 410–415 TWh in both 2014 and 2015. To address the energy shortfall, France is turning to coal and other fossil fuels, as well as imported power. Despite the COP21 carbon emissions agreement, which recently went into force, France is now burning coal at its highest levels in 32 years.

Reuters:  French energy minister says no risk of power blackouts

France does not risk electricity blackouts this winter despite 19 out of its 58 nuclear reactors on prolonged outages, French Energy Minister Segolene Royal said on Friday, a day after utility EDF postponed the restart of five reactors.”There is no risk of shortage, ” Royal said on Europe 1 radio. “As minister responsible for energy, I’m responsible for the continuity of electricity supply, it is my responsibility to make sure electricity providers are accountable.” EDF on Thursday cut its 2016 nuclear power output for the second time this year after earlier announcing that the restart of five nuclear reactors undergoing safety checks would be delayed until end-December. The reactors are among 12 undergoing checks by EDF at the request of French nuclear safety regulator ASN and represent a total nuclear power capacity of 4,500 MW.

Australian Financial Review:  Coal rally challenges China’s effort to revamp industry

China’s drive to reduce overcapacity and streamline its coal industry has sent prices of the bulk commodity soaring. Efforts initially aimed at reversing a four-year collapse and help miners repay debts have pushed coal higher and faster than anyone anticipated. The fuel burned in power stations has doubled, while the coal used in steel making has more than tripled. The boom has also turned mining companies from some of the worst performing stocks into the best. China went big on the production cuts earlier this year, causing output from the world’s largest miner to drop 11 per cent in the first nine months. It also trimmed 150 million tonnes of overcapacity by the end of August – more than Russia’s entire thermal coal exports last year – and is targeting 500 million tonnes by the end of the decade. A look at China’s ports, mines and power plants show the impact of the aggressive policy this year. Inventories dropped for eight consecutive months through August to the lowest level since 2008. That left electricity generators in a precarious position as they stockpile coal ahead of winter, which is forecast to be the coldest in four years. Power generators and steel makers have turned to the overseas market to top up supplies, boosting imports 15 per cent over the first ninth months. China is now scrambling to reverse the rally, with regulators calling the surge “irrational” and meeting miners regularly to hash out ways to stabilise prices without backtracking on the original goal of permanently erasing the glut.

Bloomberg:  Climate Promises Can’t Kill Asia’s Coal Addiction

Asia’s demand for coal is likely to increase for years to come even though countries including China, Japan and India have agreed on steps to limit fossil-fuel pollution damaging the climate. That’s the conclusion an analysis of Bloomberg New Energy Finance delivered at its conference in Shanghai on Wednesday. With envoys from 190 nations gathering next week in Morocco to advance the emissions-curbs agreed to at a landmark United Nations conference in Paris last year, the BNEF findings show that the world remains far from its goal of reining in the threat of global warming. At the same time, clean-energy investment is set to drop. “Clean energy investment will be down 15 to 20 percent this year,” Liebreich said in an interview in Shanghai. “As things stand, it will not bounce back to a new record in the next five years” because of sluggish economic growth, moves by policymakers to reduce costs and the falling price of wind and solar equipment. A common refrain is that China builds two new coal plants a week. That’s still true despite efforts by policymakers to rely less on coal for power generation and as growth in demand for power slides. Japan is pushing ahead with new coal-fired plants based on an assumption that power growth will continue for the next 15 years.

Mining:  Glencore to reopen yet another coal mine in Australia

Miner and commodities trader Glencore will reopen its Integra coal mine in southeastern Australia next year thanks to an ongoing rally in coal prices and increased demand for the commodity. “The Integra underground mine has been on care and maintenance since July 2014 and Glencore has continued to assess options for a restart against global coal market conditions,” said the company according to Reuters. The move comes only a few days after the company resumed operations at its Collinsville mine in Australia’s Queensland state. Integra, formally called Glennies Creek, became part of Glencore’s portfolio last year after its previous owner, Brazil’s Vale, mothballed it. The underground operation is expected to generate about 1.3 million tonnes of coal in 2017.

New Europe:  Finland plans to ban coal by 2030

Finland’s Economy Minister Olli Rehn has announced plans to prohibit the use of coal in energy production by 2030 – possibly by means of a statutory prohibition. In an interview with the local daily Helsingin Sanomat on November 3, the minister said the country’s energy and climate strategy currently under preparation recommends that the use of coal be stopped. The government is slated to unveil its new strategy in March 2017. As reported by The Helsinki Times, Finland would become the first country in the world to resort to a statutory prohibition to stop the use of coal in energy production. Statutory prohibitions, however, have only been adopted at the regional level, such as in Oregon and Ontario. In the interview with the daily, Rehn explained the prohibition would be comparable to the granting of voting rights to women. It would also allow the country to establish itself as the home country of cleantech, he envisions. However, Finnish Energy (ET) has expressed its dismay with the proposal.

Guardian:  Greece set to win €1.75bn from EU climate scheme to build two coal plants

Greece appears on track to win access to a controversial EU programme that could earmark up to €1.75bn (£1.56bn) in free carbon allowances for the building of two massive coal-fired power plants. The 1100MW coal stations will cost an estimated €2.4bn, and emit around 7m tonnes of CO2 a year, casting doubt on their viability without a cash injection from an exemption under Europe’s carbon trading market. The European parliament’s industry committee last month approved a rule change allowing Greece to join the scheme, the ‘10c derogation’ of the emissions trading system (ETS). Now, positive votes in the environment committee next month and at a plenary in February could set wheels in motion for the coal plants. Gerben-Jan Gerbrandy, a Dutch Liberal MEP on the environment committee, said: “Lignite [coal] has no future and should not be stimulated in any way. Greece’s intention of using public funds to revive its lignite-based model should not be allowed. Article 10C is there to help poor countries towards a sustainable energy future. Lignite does not fit these criteria.” “You couldn’t make this up,” added Imke Lübbeke, WWF Europe’s head climate and energy policy. “The ETS was intended to reduce greenhouse gas emissions but it now risks being abused to facilitate investments in the new coal plants, which would operate well within the 2060s. This would violate climate targets and is in no way compatible with the leadership role the EU aspires to play in global climate policy and carbon markets.”

New York Times:  China Pledges 18-Percent Carbon Emissions Cut by 2020

China’s cabinet issued a new climate plan targeting an 18-percent cut in carbon emissions by 2020 compared to 2015 levels, the same day that the Paris Agreement of nearly 200 countries took effect. Under the new State Council plan announced Friday, coal consumption must be capped at about 4.2 billion tons in 2020 while non-fossil fuel energy generation capacity like hydropower and nuclear power are expanded to 15 percent share of China’s total capacity. China will guarantee that emissions peak no later than 2030 under the Paris pact. There are also plans to officially launch a national carbon trading market next year.In recent years, China has become a world leader in renewable energy investment and installation of new wind and solar power capacity, but efforts by the central government to break away from coal consumption have been frustrating at times. Even after Beijing declared a “war on pollution,” hundreds of new coal power plants were approved for construction in 2015 by local governments keen to buoy their economies. Central economic planners earlier this year declared a halt on new approvals for coal plants. Energy officials went a step further last month when they declared a construction freeze on scores of partially-built plants across more than a dozen provinces, garnering praise from environmental groups like Greenpeace.

Recharge News:  EU cutting 800 million allowances to bolster Emissions Trading Sysytem

The European Commission will remove 800 million allowances from the EU Emissions Trading System (ETS) in a bid to increase the currently extremely low price of CO2 and make coal-fired power less financially attractive. Maros Sefcovic, the commission’s vice-president for energy union, said this morning that he believed the move will lead to a “more realistic carbon price”. “We have a system that technically works perfectly, but at the same time, [has resulted in] a tonne of CO2 [costing] between €4-5 ($4.40-5.50), which definitely doesn’t represent all the externalities, it doesn’t drive the innovation [in renewables] and it creates a situation where we see in some of our member states that coal is coming back,” he told The New York Times Energy for Tomorrow conference in Paris. He added that all Europe’s hard work in developing renewables and reducing carbon emissions is being “partially offset” by increasing coal production in Eastern Europe. “So we are going to remove 800 million allowances from the market and put it, as I call it, into the deep freezer — it’s called the Market Stability Reserve [MSR] — which I believe will lead to a more realistic carbon price.” However, it was unclear from Sefcovic’s remarks when these 800 million allowances will be removed. The MSR is currently not due to start operating until January 2019.

Independent:   Irish solar firms told not to expect new supports

The minister responsible for responding to climate change has moved to dampen expectations from the solar industry that a flurry of development proposals currently in the works will be backed by the Government. Denis Naughten warned last night that he will not see consumers hit with new levies in order to fund the rollout of solar projects, and even questioned the high number of schemes currently in development. The Electricity Supply Board recently called on the Government to scrap subsidies for wind and solar energy generation, prompting anger from the renewables sector. But the minister appears to share their view. He spoke last night at the Energy Institute annual dinner in Dublin, where he urged stakeholders in the solar industry to bring forward suggestions by mid-2017 that would minimise the potential impact on electricity prices of any new solar plans. “While I do see a place for solar in the energy mix, we cannot have a situation where a new support scheme leads to an excessive increase in people’s electricity bills through a higher Public Service Obligation levy,” Mr. Naughten said.

National Scotland:  Is Westminster deliberately sabotaging Scotland’s renewables industry?

First came the shock post-election announcement in 2015 by then Energy Secretary Amber Rudd which ended subsidies for onshore wind power and kyboshed renewables projects large and small across the UK. Then a fund for carbon capture was scrapped after David Cameron had described the technology as “crucial” for the UK. On the Western and Northern Isles wind energy is still in its infancy because successive UK governments over more than a decade have failed to approve construction of sub-sea interconnectors needed to connect island green energy with the mainland UK grid. But it’s not just island wind that’s been overlooked, it’s also pump storage – where wind turbines are located by hydro electric dams so surplus wind energy can be used to pump water back up to the dam for release at moments of high demand. And it gets worse. It’s not yet clear if any of the highly successful tidal and wave energy projects being trialled in the water off Orkney will be awarded any of the UK Government’s “Contracts for Difference”, now the only remaining funding mechanism for renewable energy projects. In 2014, Alistair Carmichael and Brian Wilson assured voters that renewable energy would be jeopardised by a Yes vote. Yet now the Hinkley C nuclear power plant is regarded as an “emerging renewable technology” by the UK Government – even though nuclear has been working in Scotland longer than large-scale wind, and nuclear isn’t renewable but reliant on finite supplies of uranium. So the question arises again: is this a deliberate attempt by the UK Government to destroy an invaluable industry which would provide a vital buffer of green energy, income and jobs as Scotland transitions from oil dependency towards a new, decarbonised economy? And since the Scottish Government has publicised its ambitious aim of making Scotland green-electricity self-sufficient by 2020, are UK Government tactics intended to make Nicola Sturgeon look inept and the economic case for independence more difficult?

Financial Times:  Subsidy culture undermines UK’s green industry

One of the claims often advanced for renewable energy is that it will lead to a bonanza of what are called “green jobs”. It is a way of justifying the upfront costs involved in switching the nation’s energy production to these low carbon sources. The idea is that Britain will ultimately earn squillions from the exciting new technologies that its green entrepreneurs will forge and sell. The sting, of course, is that to secure these benefits, the British public must first sluice the industry with buckets of subsidies, expected to reach £9bn a year by 2020. Recent events in the renewables sector — including attempts to reduce the burden of this support — have sparked concern among participants over consumers’ declining willingness to fund this enormous exercise in job creation. Figures from the Renewable Energy Association, a trade body, suggest that 117,000 people are already beavering away in the sector and its supply chain. No one denies that green technologies create employment. But the problem with green jobs is that they are not very valuable. Take the 17,000 people that another trade body, RenewableUK, says were employed in the wind energy business in 2013. These jobs do not exist because the industry is capable of competing on a level playing field with conventional energy suppliers, but because the public has made up for their inability to do so by giving them a large subvention. In effect, each of those wind jobs had a subsidy cost of £98,000 in that year alone, paid in the currency of more expensive electricity. That raises costs for everyone, cutting consumers’ spending power and company profits across the UK.

Solar Power Portal:  UK solar hits near 6-year low as Q3 deployment fails to reach 100MW

The beginning of the end? Or the end of the beginning? There remain mixed views on where the UK solar industry goes from now, with the more optimistic voices citing imminent grid-parity, the economic benefits of adding storage, and the scope for private-wire arrangements. Aspirations are never absent in the solar industry. But in terms of the real numbers, we have just seen the UK market decline to levels that are fully indicative of a market in transition. On a journey where though? That will be the question still on the agenda for some time to come. The UK market struggled to reach 100MW of new deployment in the third quarter of 2016, making this the lowest quarter for new solar capacity in the UK for 22 quarters, or more than five and a half years. Round this to six years for simplicity and we are back to 2010 numbers. The final figure came in at 82MW, with more than half coming from small rooftops, and somewhat back to the old days, before ground-mount farms became commonplace in the UK. Ultimately, the quarter was the first in which the effects of changes to both ROCs and FiTs during 2014 and 2015 were felt by the industry. The problem of runaway solar deployment – on rooftops and fields – is certainly a thing of the past. The current Conservative government has inherited an industry going through the final motions of incentivized growth, and in this respect there are positives that can only be taken, as they no longer have an unwanted problem to solve.

Renewable Energy Magazine:  Solar Power Purchase Agreements no longer viable in the UK solar market

An estimated two-thirds of the UK’s 12 GW solar capacity has been built using Power Purchasing Agreements (PPAs), where solar farms or large commercial rooftops contract to sell their power to a third party. The large-scale solar industry, which matches onshore wind for low-cost clean power, had the great majority of its support removed this year and deployment has plummeted. Figures released yesterday by Solar Intelligence show the lowest quarterly deployment of solar power for nearly six years. However, only modest Government intervention is needed to enable large-scale solar to access the UK market again. The industry is seeking a new auction round so that the cheapest renewables can compete on a level playing field for Contracts for Difference, enabling the best deal for consumers. Modest but urgent reforms are also needed to Feed-In Tariffs, costing only £6 million over this parliament, to boost solar deployment on large commercial roof tops. The industry is also seeking fair tax treatment for rooftop solar. Taken together the measures could get the solar industry back on track to zero subsidy by 2020.

PV Magazine:  Solar not to blame for UK’s renewable subsidies overspend

It is well documented that solar has fallen out of favor of the British government, and one clear reason that had been presented for this was the GBP 2 billion overspend on renewable subsidies under the Levy Control Framework (LCF). The overspend between January 2015 and June 2015 chimed to the tune of GBP 2 billion, with solar bearing much of the blame from a disgruntled government. However, a new NAO report breaks down the reasons for the overspend, proving that solar only played a very minor role. In fact, according to the report, a large majority of the GBP 2 billion overspend was a result of offshore and onshore wind adoption, accounting for a total of GBP 1,250 million between the two, compared to just GBP 130 million a result of solar. Even anaerobic digestion accounted for more of the overspend than solar, at GBP 140 million. However, despite the minor role that solar played in the overspend, the industry still suffered the harshest consequences as a result. The government has ripped the subsidy schemes away from solar technology, resulting in a popular technology stagnating in the U.K.

Telegraph:  How National Grid tried to keep £87m of consumers’ cash for pipelines it didn’t build

National Grid attempted to keep up to £87m of consumers’ cash it had collected to fund new gas pipelines despite deciding not to build them after all. The utility giant was criticised for the “unjustified” move by consumer group Citizens Advice, which highlighted the claim as part of a damning critique of the way energy networks are paid for. Energy regulator Ofgem determines the amount National Grid can charge bill-payers for maintaining and upgrading its networks, through eight year “price control” settlements. When spending on its gas transmission networks for the 2013-21 period was set in 2012, it included £168.8m on new pipelines to reinforce the grid near Avonmouth.By the time the regulator came to conduct a mid-year review this summer, National Grid had decided the work was no longer needed. Despite this, it has now emerged that the company argued it should be allowed to keep some or all of the £87m it had already collected as removing it would be “retrospective action”. In a submission to Ofgem, which has said it intends to deny National Grid’s claim and make it refund the cash, Citizens Advice said: “A publicly spirited company would not seek to charge consumers for something they did not build.” A spokesman for National Grid said it had “identified the opportunity to generate big savings for consumers over the potential Avonmouth project. The regulatory system is intended to provide incentives for companies that identify efficiencies like this that will lead to lower bills,” he said. “This is what the company has said to Ofgem in its discussions on this issue.”

Christian Science Monitor:  Are you melting a lot of Arctic sea ice? How your CO2 emissions add up

According to new calculations, for every metric ton of carbon dioxide emitted, about three square meters (approximately 32.3 square feet) of Arctic summer sea ice disappears. And, with humans currently emitting about 35 to 40 million tons of CO2 each year, the future doesn’t look very frozen. It’s not hard to rack up those emissions. About 2,433 miles of driving – roughly the distance from Washington, DC to Las Vegas – or just one seat on a return flight from New York to London – on average produces a metric ton of CO2 emissions. Or, for those who aren’t long-distance travelers, just over 75 miles of driving in a typical fossil-fuel powered car produces enough emissions to melt one square foot of ice. That’s according to Dirk Notz, head of a research group at the Max Planck Institute for Meteorology in Germany that studies sea ice. Dr. Notz calculated the relationship between CO2 emissions and the loss of Arctic summer sea ice as lead author of a paper published Thursday in the journal Science. “Our study now provides individuals with the sense that their own individual actions make a difference,” Notz tells The Christian Science Monitor in a phone interview. “If I decide to drive my car a little less or to buy a car that uses less fuel, for example, all these little actions will make a difference for sea ice.”

Roy Spencer:  UAH global satellite temperatures down slightly

The Version 6.0 global average lower tropospheric temperature (LT) anomaly for October 2016 is +0.41 deg. C, down a little from the September value of +0.44 deg. C

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21 Responses to Blowout Week 149

  1. Alex says:

    How does and how will priority despatch work in practice?

    On a windy and sunny day, if solar and wind were to make up 100% of German consumption, the grid has to stop buying fossil fuel and nuclear power sources, unless it can find export customers for them?

    Are Poland and other neighbouring countries obligated to ramp down their coal plants, in order to take German electricity which is “renewable”?

    In theory, once priority despatch is ended, not much will change, as solar and wind have the lowest marginal cost. But not quite so easy. A lignite plant or a Gen III nuclear plant cannot just shut down with no cost implication. If the forecast low prices extend for a few hours, they too will be prepared to sell electricity at negative prices. Which will of course drive prices lower.

    What will the effect of this be?

    Are there any applications that can consume vast amounts of electricity and be cost effective at zero prices? I was thinking of biorock ( production for sea defences.

    • Roger Andrews says:


      I don’t think anyone knows for sure how removing renewables’ priority grid access would work in practice, but it will certainly further discourage investment in Europe’s “clean energy” sector, which is already going south.

      The report cites scenarios that show emissions increases of up to 10% if renewables lose grid priority. Right at the bottom, however, the Guardian article states that the scenarios show emissions increases of only 45-60 million tonnes CO2. This is nowhere near 10% of the EU’s total CO2 emissions (3,490 million tonnes in 2015 according to BP) and only 4-6% of EU electricity sector CO2 emissions, which make up about 30% of total emissions. I suspect that much of the projected 45-60 million tonne increase may come from reduced biomass generation, which the EU assumes, incorrectly, to be carbon-free. “The removal of priority dispatch for biomass would indeed, in the first instance, imply an increase in GHG [greenhouse gas] emissions,” the paper says. It occurs to me that one of the EU’s goals here may be to cut back on biomass without directly legislating any biomass cutbacks.

      “If priority dispatch is removed, then renewables must be given a fall-back option of access and renumeration in the balancing markets to help stabilise the system, or clear levels of compensation in the event that curtailment is necessary,”. Exactly how intermittent renewables, which have a history of destabilizing grids, will be used to stabilize them isn’t made clear.

      • Willem Post says:


        Germany’s grid, as all grids, always has a must run capacity in service.

        Those generator outputs vary a little with daily demand.

        Those generators are minimally affected by wind and solar.

        If Germany produces too much energy, the easy way out is to dump it into neighbor grids at near zero or negative prices.

        That cannot continue for traditional generators. They would go broke.

        What is proposed is to curtail the disturbers, I.e., wind and solar.

        In my opinion, this is about 5 years overdue.

        Germany has to build much more grid, especially north-south,

        However, that has been held up by NIMBY for about 15 years, who want all to be buried.

        But levelized cost would be 3 times overhead, because wind and solar power surges significantly shorten lives of HVDC systems.

        There appears to be no end to the blessings of wind and solar.

        More storage is next, even though pro-RE folks maintain it is barely needed.

        Not heeding them is long overdue; rah rah takes a long time to die.

      • Roger

        ““If priority dispatch is removed, then renewables must be given a fall-back option of access and renumeration in the balancing markets to help stabilise the system, or clear levels of compensation in the event that curtailment is necessary,”

        Doesn’t this happen already anyway? Don’t renewables already get paid to curtail. This suggests even more payment for not producing.

  2. A C Osborn says:

    The BBC were crowing about the fact that the Paris Agreement has become law.
    They blythely mention the cost of $100B a year and $16.5Trillion by 2050.
    All to achieve absolutely NOTHING climate wise, but an aweful lot re-distribution of wealth world wide wise.

    • Graeme No.3 says:

      But who does it get redistributed to? Not to Africa or Asia for the dwellers in poverty.

    • Willem Post says:


      The capital cost to remove fossil fuels from the US energy mix and electrify the US economy would be at least $786 b/y for the 2016 – 2050 period, based on moderate growthrates of population, energy consumption and GNP; if higher growthrates, the capital costs would be higher. For comparison, the US defense budget is about $600 b/y.

      Worldwide, the energy transition capital cost would be about $3.93 TRILLION PER YEAR for the 2016 – 2050 period, because the US economy is only 20% of the world economy. However, world capital costs would be higher, because world growthrates are higher than of the US. All capital costs are “overnight”.

      During COP-21, the 2015 UN Climate Conference in Paris, some proponents were urging to increase worldwide energy transition spending from $285.9 billion* in 2015 to $1.0 trillion/y, which shows a significant lack of understanding of the magnitude of the worldwide transition.

      It would be much better to stretch the worldwide energy transition over a period of at least 100 years, as that would be a more feasible time period, because it would reduce worldwide capital costs from about $3.93 trillion/y to about $1.31 trillion/y.

      * US $44.1 b, Europe $48.8 b, Japan $43.6 b, China $102.9 b. Diverting this capital from activities that likely would produce profitable goods and services, to the build-outs of renewable energy systems that produce more expensive energy than from fossils, would make China’s economy less competitive, which would contribute to its slower economic growth.

      There are side benefits, such as cleaner air, etc., but they would take some decades to realize, and their economic benefits, such as lesser health care expenses, could not be easily quantified.

  3. CO2 is not the bogey man you make it out to be . It has little impact on So called Global Warming or Climate change. See Dr, Franks video on this subject.

    • A C Osborn says:

      No it is the very best thing that could happen to the world.
      More Flora means more habitat and food for the Fauna.
      The theory of Global warming is the disaster, not the Co2 or a couple of degrees of warmth.

      • John ONeill says:

        Here’s a timeline for the last twenty thousand years of earth’s temperature. For the last 9,000, temperatures have only varied by roughly half a degree C from the 1961-90 average. ( That’s about when farming started, and the sabre toothed tiger went extinct. )
        To find temperatures similar to what we’re heading for in the next century, you’d have to go back over a hundred times further.

        • Javier says:

          That timeline is incorrect. It has important errors that you get when a cartoonist tries to interpret scientific issues. Here you have a more correct one:

          Temperatures similar to present ones have been seen within the last 5000 years, and nobody knows what temperatures will take place in the next century.

          • John ONeill says:

            Your degree was in biochemistry and biology, Randall Munroe from xkcd did one in physics, so I don’t see why either of you should claim preeminence in climatology. He says in the notes on his chart that short term aberrations from the climate line he drew are plausible, but there’s a constraint on how large and how long they could be – the peak of the Eemian was estimated at about 2 degrees above the modern average, and had sea levels ~ 6 metres higher than today’s. Nothing like that happened during the Holocene climate optimum, so it’s unlikely temperatures stayed much above what we have now for long.

  4. Jim Brough says:

    Giving despatch priority to electricity produced by wind and solar is a form of economic madness which forces their subsidised electricity into the market and forces nuclear, coal and gas to spend more to cope with the intermittent wind and solar supply. That increases costs for everybody.

    An unsustainable system.

    Now we have supporters of wind and solar spruiking storage by batteries ( dams being our of the question ) so now we have to dig more mines to provide the materials and lots of energy and CO2 emissions to make the batteries. Is that environmentally friendly ?

    Maybe one day the renewable energy puppies will stop chasing their tails and grow up.

  5. Rob says:

    Did anyone notice the 2 contradictory oil reports

    ‘The oil and gas industry has responded “strongly” to the latest offshore licensing round.’

    ‘Britain’s latest tender for offshore exploration permits attracted the lowest interest in 14 years’

    Any ideas anyone ?

    • I put these articles side by side on purpose. Likewise the contradictory reports on whether Saudi Arabia did or did not threaten to increase production.

      There’s also a contradiction in the report on China’s emissions reduction plans that no one has picked up on. China now targets an 18 percent reduction in carbon emissions by 2020 relative to 2015 levels while at the same time guaranteeing that its emissions will peak no later than 2030. Go figure.

      • myrddinseren says:

        China Says It’s Going to Use More Coal, With Capacity Set to Grow 19%

        The reportage in the Bloomberg and similar articles seems to be along the lines of grudging acknowledgment that China will continue to roll out new coal-fired generating capacity.

        But hip-hip-hooray – look at all the extra wind and solar too, the reporters cheer. So maybe the coal is just there to back up the extra renewables. Or something.

        Or maybe China is determined to maintain energy security by utilising its domestic resources ?

        • OpenSourceElectricity says:

          Since a lot of coal power plants are already idle in china, and the use of the rest is falling (hours per year).
          So i see thre possible outcomes:
          a) china ends up with hundreds of brand new and unused coal power plants as stranded assets (not unklikely)
          b) the power consumption which is more or less flat today starts rising strongly again (why?)
          c) china start to build a lot of power lines over the borders in all directions to export surplus power from any kind of generation. (That would be a good idea, but it would be a even better idea without hundreds of unnneccesary coal power plants)

          • Euan Mearns says:

            In looking at rate of new build power stations in China, you also need to look at closures. For many years China has built new higher efficiency and cleaner power stations at a phenomenal rate to replace old dirty plant that is located in cities.

          • OpenSourceElectricity says:

            @ Euan – there have been large rounds of closures of old plants already in the recent years, and also china did not have that much generating capacity in the 1970’s or 1980’s so there is only a limited amount of old capacity which can be closed down now. Most of the capacity was built in the last 20 years, or even in the last 10 years.

  6. Rob says:

    Lesley Riddoch: Is Westminster deliberately sabotaging our renewables industry

    Does Scotland have much of a renewables industry do they manufacture anything

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