This week’s Blowout features the UK summer budget, which has not been well received by the renewable energy industry:
The Conversation: Whatever happened to the greenest ever Conservative Party?
(Image credit: Tidal Power)
In a year when the all-important UN climate change summit will take place in Paris and the UN’s sustainable development goals will be finalised, one would have thought the government of one of the world’s most powerful nations might seize the moment to put forward progressive environmental policies. Unfortunately the summer budget introduced by UK chancellor, George Osborne, has failed to do just that. But the new, fully Conservative, government has signalled a rollback of green policies. In his summer budget, Osborne promised continued tax breaks and subsidies for North Sea oil and gas – which, understandably, delights the industry. Osborne’s budget continued the onslaught on renewable energy, as he announced the removal of the climate change levy (CCL) exemption for renewables, which might cost the green energy industry up to £1 billion by 2020/21. This comes after the Queen’s Speech announcement to end subsidies for onshore wind projects. Not to forget the chancellor’s new commitment to road building, financed by a new system of green car taxes. New roads will not help reduce the significant share of the UK’s private transport system in carbon emissions and will increase the pressure on UK cities’ air quality, which is among the worst in Europe. The government has also ditched its pledge to ensure all new homes were zero carbon.
More below the fold on the UK budget fallout, plus the increasing US rig count, decreasing US shale oil production costs, Iran plans to double oil exports, Rosatom in bed with South Africa, Greece doing pipeline deal with Russia, Gazprom not paying its bills, 2,100 new coal plants planned worldwide, UK’s last underground coal mine closes, New England states having difficulty meeting emissions targets, Prince Charles sounds off again, Bill Gates trashes renewables, a new all-electric truck from BMW, another CCS project down, 20ft of sea level rise swallowing America and the end of rare earth mining in the US.
Telegraph: Green energy subsidies spiral out of control
The cost of subsidising new wind farms is spiralling out of control, government sources have privately warned. Officials admitted that so-called “green” energy schemes will require a staggering £9 billion a year in subsidies – paid for by customers – by 2020. This is £1.5 billion more than the maximum limit the coalition had originally planned. The mounting costs will mean every household in the country is forced to pay an estimated £170 a year by the end of the decade to support the renewable electricity schemes that were promoted by the coalition. Tory ministers are said to be “angry” at the scale of the over-running costs. They are blaming the Liberal Democrats who ran the Department for Energy and Climate Change for the past five years for the spectacular failure to control renewable energy programmes. The huge excess spending is thought to be a result of higher-than-expected numbers of rooftop solar panels being fitted on houses, falling wholesale energy prices, and offshore wind farms proving more productive than anticipated.
Guardian: UK scraps zero carbon home target
Housebuilders, planners and green groups have condemned the government for scrapping plans to make all new UK homes carbon neutral. The zero carbon homes policy was first announced in 2006 by the then-chancellor Gordon Brown, who said Britain was the first country to make such a commitment. It would have ensured that all new dwellings from 2016 would generate as much energy on-site – through renewable sources, such as wind or solar power – as they would use in heating, hot water, lighting and ventilation. This was to be supported by tighter energy efficiency standards that would come into force in 2016, and a scheme which would allow housebuilders to deliver equivalent carbon savings off site. However, both regulations were axed by the government on Friday, in a move Julie Hirigoyen, chief executive of the UK Green Building Council, said was “the death knell” for the zero carbon homes policy. Ed Davey, former secretary of state for energy and climate change suggested David Cameron “may as well hug a coal power station”.
An increase the amount of solar panels, with the latest statistics showing there are more than 709,000 solar installations across UK, and the glorious sunshine means solar arrays from large farms to home roof panels are believed to be supplying 16% of power needs this afternoon. The solar industry has set out how it believes the government can double the amount of solar and make it as cheap as fossil fuel electricity by 2020. An ambitious programme to deliver two million homes with solar power, 24,000 commercial rooftops and 2,000 solar farms by 2020 and providing 56,900 jobs would cost around £13.35 on the average consumer energy bill by the end of the decade. Though it would cost £350m more than the government’s planned spending of just under £1.2bn in 2020, it would deliver around twice as much solar capacity as current policies and would lead to solar being free of subsidies, the industry argues.
Wind power generated 33% of Scotland’s electricity needs in June, according to analysis by WWF Scotland. The green group analysed wind and solar data provided by WeatherEnergy and found that wind turbines in June in Scotland provided an 620,144MWh of electricity to the National Grid, out of total consumption of 1,891,536MWh. This represents an increase of 120% compared with June 2014, when wind energy provided 281,735MWh, WWF Scotland said. WWF Scotland director Lang Banks said: “While much of the attention may have been focused on the welcome summer sunshine, June also turned out to be an astonishing month for wind power in Scotland. “Thanks to a combination of increased capacity and stronger winds, output from turbines more than doubled compared to the same period last year. These figures show just how much wind power has gone from strength to strength. However, wind power in Scotland could and should be playing an even bigger role in helping to reducing climate emissions from the power sector.”
Prince Charles has said that “profound changes” to the global economic system are needed in order to avert environmental catastrophe, in an uncompromising speech delivered in front of an audience of senior business leaders and politicians. The heir to the throne – often criticised for his meddling in political affairs – argued that ending the taxpayer subsidies enjoyed by coal, oil and gas companies could reduce the carbon emissions driving climate change by an estimated 13%. Although the prince’s passion for environmental causes is well known, the speech delivered on Thursday evening in St James’s Palace, London was particularly pointed in its criticism of companies that protected vested interests and came with a report that proposed raising taxes on them. Speaking at a event for the University of Cambridge’s Institute for Sustainability Leadership (CISL), of which he is a patron, the prince complained that “the irresistible power of ‘business as usual’ has so far defeated every attempt to ‘rewire’ our economic system in ways that will deliver what we so urgently need”.
Business Insider: US oil rig count rises for second straight week
The US oil rig count rose for a second straight week. According to driller Baker Hughes, the count climbed by five to 645. Last week, the change in the oil rig count turned positive for the first time in 2015, climbing by 12 – the first increase since December 5, 2014. The combined count of oil and gas rigs also climbed, for the first time in many weeks, by nine. Morgan Stanley thinks the rig count has bottomed. Twelve weeks ago, analysts noted, based on historical patterns, that the rig count plunge halts about 25 weeks from when producers begin taking equipment offline.
OPEC began its “bear raid” on the week of July 4, 2014. The active US drilling oil-rig count at the time had just hit a multi-decade high of 1873. By knocking the price down to under $60 a barrel over the next 12 months, OPEC was able to shrink the active U.S. oil-rig count down to 628 by late June 2015, the lowest since August 6, 2010. But to OPEC’s shock, U.S. oil production, rather than falling from 8.6 million barrels a day (bpd), actually rose by April to 9.7 million bpd. IHS CERA business analysts attribute the continued U.S. production momentum to the cost of oil production dropping by 32 percent in the U.S. as drilling and service vendors have slashed prices to stay busy. The U.S. “fully burdened exploration and production “break-even” cost is now $51 per barrel, and falling fast. Furthermore, with hundreds of American oil companies having already paid the exploration lease acquisition costs to accumulate tens of thousands of drilling sites, the production-only break-even cost for positive cash-flow is about $29 a barrel. After tacking on a 9 percent profit, U.S. domestic oil companies are now incentivized to produce domestic oil any time the price is above $32 a barrel. That explains why the U.S. active oil-rig count, after 29 straight weeks of decline, rose by 12 to 640 for the week of July 4, 2015, according to Baker Hughes Inc. OPEC’s action has been a disaster. The cartel has managed to drive down the sustainable break-even cost for U.S. production, thus helping the domestic oil companies take even more market share from OPEC.
Wall Street Journal: Iran Wants to Double Oil Exports After Sanctions Lifted
Iran wants to double its crude exports soon after sanctions are lifted and is pushing other members of the Organization of the Petroleum Exporting Countries to renew the cartel’s quota system, a top Iranian official said. Both developments could set up a clash with Saudi Arabia, which is scrambling to raise its own export numbers and has opposed the return of production limits on individual OPEC members. Iran’s efforts underscore how the country’s full return to the export market would upend the status quo among leading producers if Tehran clinches a deal with six world powers that would lift sanctions in exchange for curbs on its nuclear activities. The latest deadline for a deal is Tuesday and officials said the elements of an agreement were falling into place over the weekend, though there were still important sticking points that could scuttle it. Should sanctions be lifted, Iran’s deputy oil minister for planning and supervision, Mansour Moazami, said in an interview that his country’s oil exports would reach 2.3 million barrels, compared with around 1.2 million barrels a day today. “We are like a pilot on the runway ready to take off. This is how the whole country is right now,” he said.
Financial Times: Nigeria’s oil bill: back to the drawing board
Nigeria’s new administration is preparing to take the country’s long-stalled petroleum industries bill (PIB) back to square one, according to documents leaked from within the ruling party. The PIB has been stuck in Nigeria’s legislature for six years, costing the country an estimated 470,000 in jobs and $100bn in lost investment by 2020. The controversial PIB aims to unify Nigeria’s 16 petroleum laws in one document, while improving transparency at the Nigerian National Petroleum Company. Stumbling blocks have included international oil companies’ objections to royalty rate rises, disputes about revenue sharing from the federal oil account to each of Nigeria’s 36 states, and the NNPC’s resistance to increased oversight. The NNPC has found itself the subject of increased international scrutiny since 2014, when $20bn was alleged to have gone missing from Nigeria’s oil accounts by Lamido Sanusi, the former central bank governor. Mr Sanusi was removed from his position within weeks. A recent audit following these allegations concluded the oil company had “a ‘blank’ cheque to spend money without limit or control”.
Yahoo News: South Africa, Russia sign nuclear agreements
South Africa and Russia signed two memoranda of understanding on nuclear power co-operation on Wednesday, part of efforts by Africa’s most advanced economy to lessen its reliance on coal and overcome power shortages that threaten economic growth. The agreements, signed at the summit of emerging BRICS nations in Ufa, Russia, are between Russia’s state-run nuclear energy company Rosatom and South Africa’s department of energy. They call for joint projects to educate and encourage “public acceptance of nu-clear power” in South Africa, the South African department of energy said in a statement. South Africa is considering using reactors from Russia’s Rosatom and Westinghouse for its planned 9,600 megawatt nuclear fleet expansion, an energy advisor to the government said in June. The country plans to build six new nuclear power plants by 2030 at an estimated cost of between 400 billion rand and 1 trillion rand ($32 bln and $80 bln).
Turkmenistan, irked by falling natural gas exports to Russia, hit out at Moscow’s gas export monopoly Gazprom on Wednesday, saying the energy giant had not paid for gas purchased from the Central Asian country so far this year. “Since the beginning of 2015, OAO Gazprom has not paid for its debts to state concern Turkmengas for the shipped volumes of Turkmen natural gas,” Turkmenistan’s Oil and Gas Ministry said in a statement on its official website It did not say how much Gazprom owed Turkmenistan, nor did it say how much Turkmen gas had been shipped to Russia to date. “Russian company Gazprom has become insolvent on its natural gas purchase-and-sale contracts due to the continued global economic crisis and economic sanctions imposed by Western nations on Russia,” the ministry’s statement said. Gazprom declined immediate comment. Turkmenistan, a nation of 5.5 million, holds the world’s fourth-largest reserves of natural gas, but lacks gas export routes. Its criticism is likely to escalate a war of words with Gazprom which flared up at the end of last year after the Russian company announced it would cap its purchase of Turkmen natural gas by 4 billion cubic metres (bcm) this year, way below its imports of around 11 bcm in 2014. Gazprom says that its progress in natural gas exploration elsewhere has made the purchase of gas from Turkmenistan unprofitable.
Telegraph: Greece admits pipeline deal with Russia
Greece has admitted for the first time it is planning a €2bn gas pipeline with Russia. The move is likely to worry the US, which has stepped up its involvement in Greece’s debt talks with international creditors over fears the cash-strapped country could drop out of the single currency and come under the influence of its Cold War rival. Panayotis Lafazanis, Greece’s energy minister, said the move would be a key part of the country’s “multi-faceted” foreign policy and would create 20,000 jobs, the Financial Times reported. Reports in April suggested Moscow was ready to provide advanced payment to Greece for the “Turkish Stream” pipeline project, which will transport 47bn cubic metres of Gazprom’s gas annually from 2018. Germany’s finance minister, Wolfgang Schauble, has previously said he had no objection to any deal with Moscow, but that ultimately it would not “fix Greece’s reform problems”. Mr Lafazanis, who heads up the Left Platform of Syriza, has hailed a new dawn in Greco-Russia relations and has invited the likes of state-sponsored Gazprom to drill for oil off the Greek coast.
There’s a large amount of coal capacity being planned worldwide, some 2,177 plants in all. Not all of these coal plants will actually get finished — many are getting sunk by local opposition or economic headwinds. But if even one-third of these planned plants get built, we run a high risk of busting through the 2°C global warming threshold. And right now, we’re on track to do just that.Below is a breakdown of the proposed plants by generating capacity. To put this in perspective, the world added about 626 gigawatts of coal capacity, on net, between 2005 and 2013. Going forward, there’s another 276 gigawatts under construction, and another 1,000 gigawatts in various stages of planning
Bloomberg: U.K. to End 300 Years of Deep Coal Mining
Britain plans to close its last deep coal mine in December, spelling the death of an industry that’s kept the nation’s economy humming since the Industrial Revolution.The U.K.’s last deep underground mine, located at Kellingley in northern England, will shut around Dec. 15, U.K. Coal Holdings Ltd. said in a statement. The company’s Thoresby mine ceases production on Friday. The closing of Kellingley will mark the nation’s exit from an industry that employed more than a million workers at 3,000 pits a century ago. Since 2000, U.K. power generators Electricite de France SA to RWE AG bought more of the fuel from abroad, where coal from Australia to Colombia is cheaper, according to the Federation of U.K. Coal Producers. European prices slumped to an eight-year low in April.
Yahoo News: Austria’s crusade against nuclear energy
Austria’s announcement Monday that it would challenge state aid for a new nuclear plant in Britain marks the latest step in the country’s solo campaign to roll back atomic energy in Europe. “It’s an energy source from the last century,” Environment Minister Andrae Rupprechter told AFP in a recent interview. “It is outdated because it’s a non-sustainable, high-risk source that is only competitive with an unjustified subsidy,” he added, referring to the Hinkley Point C contract in western England. “The future lies in renewable resources and we have to create a level playing field to give these resources the fairness to compete in the market.” Austria has already warned it will veto any nation attempting to obtain EU subsidies for nuclear programmes.
The Department of Energy has suspended Recovery Act funding for a California project to trap carbon emissions from a coal-fired power plant, an agency spokeswoman said. DOE had set aside $408 million for Hydrogen Energy California LLC’s effort to produce power from coal and petroleum coke, trap most of its CO2 emissions, and use the carbon for making fertilizer and stimulating oil wells. Of the total, $275 million was American Recovery and Reinvestment Act dollars. But DOE says HECA has not met certain benchmarks. The company has, for example, recently said it failed to secure customers for the enhanced oil recovery portion of the project. That means DOE is withholding $250 million in funding for HECA. DOE has already reimbursed the company $153 million. The agency has said the money was well spent because it has helped enhance knowledge of such projects. DOE says it made the decision months ago as a way to protect taxpayer money.
San Francisco Chronicle: Vermont ducks energy problems
When Vermont became the first state to ban hydraulic fracturing for natural gas in 2012, Gov. Peter Shumlin said the ban was “in keeping with our environmental ethic and our protection of our natural resources.” But the state is likely on the verge of a big increase in the use of fracked gas from Canada. The aging Vermont Yankee nuclear plant closed in December after much cajoling by Shumlin and others. But the state is still getting sig-nificant nuclear power from the Seabrook station in New Hampshire. Its largest utility, Green Mountain Power, gets 9 percent of its mix from Seabrook, company spokeswoman Kristin Carlson said. Environmentalists were elated when the fishery-damaging Newport 11 dam was removed from northern Vermont’s Clyde River and they have pushed for more dam removals. But Vermont takes about a third of its power from the huge dams on the rivers of northern Quebec. All of it raises a question: Is greener-than-thou Vermont just exporting its energy problems? “We need to take responsibility for where that power comes from and we need to make sure we are meeting our environmental goals in that energy use,” Sandra Levine, senior attorney with the Conservation Law Foundation, said in an interview. “And that we’re not just protecting our own very small backyard.”
Governor Charlie Baker wants to step up imports of renewable energy into Massachusetts and plans to file legislation Thursday that could help bring up to 2,400 megawatts of hydropower into the state from Canada. Matthew Beaton, Baker’s energy and environ-mental affairs secretary, said Massachusetts needs more electricity from nonfossil-fuel sources such as hydropower if it is to meet a 2020 deadline for reducing greenhouse gas emissions. The additional hydropower would also provide a reliable source of electricity at a time when several older power plants in New England have closed. “A lot of the other renewable solutions we have aren’t as consistent,” Beaton said. “The sun’s not always shining. The wind’s not always blowing.” Baker’s bill would require major electric utilities to seek long-term contracts from hydropower generators — most likely Canadian companies such as Hydro-Quebec and Nalcor Energy. There are several big power line projects proposed to tap Canadian hydropower and address transmission constraints in northern New England. Officials in the Baker administration said the legislation, if passed, could help get one or two of those projects off the ground. The utilities would be required to enter into contracts for about 1,200 megawatts, although a portion could come from renewable sources such as wind farms as long as hydropower is used as a backup.
Wall Street Journal: Obama’s renewable energy fantasy
Recently Bill Gates explained in an interview with the Financial Times why current renewables are dead-end technologies. They are unreliable. Battery storage is inadequate. Wind and solar output depends on the weather. The cost of decarbonization using today’s technology is “beyond astronomical,” Mr. Gates concluded. Google engineers came to a similar conclusion last year. After seven years of investigation, they found no way to get the cost of renewables competitive with coal. If Mr. Obama gets his way, the U.S. will go down the rocky road traveled by the European Union. To see what the U.S. might look like, Europe is a good place to start. Germany passed its first renewable law in 1991 and already has spent $440 billion (€400 billion) on its so-called Energy Transition. The German environment minister has estimated a cost of up to $1.1 trillion (€1 trillion) by the end of the 2030s. With an economy nearly five times as large as Germany’s and generating nearly seven times the amount of electricity (but a less demanding renewables target), this suggests the cost of meeting Mr. Obama’s pledge is of the order of $2 trillion.
Telegraph: Greens destroying the world’s wildlife
The flailing blades of wind turbines across the world may have been shown to kill millions of birds and bats; a fact that their enthusiasts, including the Royal Society for the Protection of Birds, do not advertise. But even more blatant is becoming the wholesale destruction of forests, thanks to the lavish subsidies now being offered to burn them as “biomass” to make electricity. A chilling recent report by the journalist David Rose showed the ecological devastation being wrought over thousands of square miles of hardwood forest in the US to fuel power stations in Britain such as Drax, by a process that even some environmentalists now admit ends up by giving off more CO2 than the coal it is intended to replace. In another report, Rose used shocking pictures to show how the “biomass” craze, heavily subsidised through Decc’s Renewable Heat Initiative, is creating a similar swath of destruction across ancient woodlands here in Britain, even including some owned by the climate-dotty National Trust. It has long been known that a scandal of the age is the even greater havoc being wrought in south-east Asia, where thousands of square miles of rainforest, brimming with life, are being replaced by sterile palm oil plantations to meet the EU’s targets for “biofuels”. Last month, the Telegraph published a report on how, inter alia, this is killing off the last orang-utans across a huge area of Sumatra.
Green Car Reports: How To Cut Vehicle Emissions 90 Percent: Get Rid Of Human Drivers
A recent study claims that replacing most private cars with a fleet of self-driving electric taxis could cut greenhouse-gas emissions by 90 percent, reports Popular Science. Using electric powertrains would also basically eliminate oil consumption in cars, researchers argue. That’s because in addition to cutting the cost of fuel and eliminating the cost of a driver, cars could run 24 hours a day, seven days a week–increasing the number of fares. The relatively limited ranges of most current electric cars reportedly wouldn’t be an issue either. Because the majority of cars would be operated as part of a coordinated fleet in this scenario, a car needing to recharge could simply be replaced in the field by another. That assumes the taxis will primarily operate in urban areas, where the distance of a single trip is unlikely to exceed a car’s range. And with the first mass-priced 200-mile electric cars arriving within two or three years, the need for a taxi to recharge during the 8- to 12-hour shift of today’s typical taxi driver will be reduced or eliminated. If nothing else, this concept would essentially leapfrog the issue of gaining consumer acceptance for electric cars, by encouraging consumers to give up their cars entirely.
High Country News: US’s only rare earth mine files bankruptcy
Last Thursday, Molycorp filed for Chapter 11 bankruptcy. The move was not entirely unexpected, and its ultimate impact on the Mountain Pass mine in southeast California — the only U.S. producer of rare-earth elements — is not yet entirely clear. Molycorp ended its corporate life at a price of 35 cents per share, less than one two-hundredth of what it went for at its all-time high: $79.16, on May 3, 2011. By any measure, it was a spectacular collapse, but the timeframe — barely more than four years — and the mundaneness of its causes make it exceptional. Molycorp was not outmoded by new technologies. It did not overestimate its resources. Its product is still in high demand. Instead, the company was done in by simple market realities. In 2010, China artificially raised the price of rare-earth elements by restricting exports. The result was an increase in supply: as existing mines outside China expanded production; as mothballed mines (like Mountain Pass) came back online; and as new mines opened. Predictably, rare-earth prices spiked after China cut its exports — a textbook panic. Then, just as textbook, they rapidly receded.
BMW has deployed Europe’s first 40-tonne, fully-electric truck. The vehicle, which will be charged using 100 percent renewable energy will initially be used to transport automotive parts between facilities in Munich. The result of a partnership between BMW and service provide Scherm, the truck has a range of 100km (62 miles) on a full battery and can be fully charged in three to four hours. The truck is the first of its kind to be used on public roads in Europe and has already completed its first test drives. It will initially be used to transport vehicle components such as shock absorbers and springs between a BMW factory and Scherm’s logistics centre and should cover up to 16km (10 miles) a day. BMW said that as well as generating no direct CO2 emissions the truck would be quieter than conventional diesel vehicles. Compared to a diesel engine the electric truck will save 11.8 tonnes of CO2 per year, the equivalent emissions generated by a BMW 320d EfficientDynamics car going around the world almost three times.
We may be locked in for catastrophic sea level rise. It’ll take awhile, but according to a new paper published in the journal Science, the planet’s on track to see sea levels rise by at least 20 feet — and that’s only if we manage to limit global warming to 2 degrees Celsius, a target many believe we’re already doomed to surpass. Once the ice sheets start melting, as apocalyptic headlines have already made clear, there’s no real way to stop them. And during periods in Earth’s past when temperatures were 1 to 3 degrees Celsius above preindustrial levels, sea levels surged. Suffice it to say such changes would render our coastlines unrecognizable. In order to better fuel our nightmares, Climate Central created an interactive map showing exactly what those 20 feet of sea level rise would mean for the U.S. By the time this happens, be it the early scenario of 2200 or centuries after that, America will already be a different place regardless, but the rising tides will mean that in addition to everything else, we’ll be down 48,000 square miles of land — currently home to 5 percent of our population.