Monthly Archives: November 2013

The unsuccessful success story

Last week there was quite some fuss about the near bankruptcy of a Belgian green energy producer, Electrawinds. They manage installations that produces green power via wind, solar, biomass and also bio-diesel.

I know there were a lot of bankruptcies last year among for example solar panel installers (because of less subsidies given to install solar panels), but Electrawinds isn’t really a small company and received loads of governmental support. Until shortly it was considered a success story. There were many projects, not only in Belgium, but also in France, The Netherlands, Italy, Serbia and Kenya. There were even plans to build a prestigious, futuristic looking new headquarter in Ostend.

But last year they reported a loss of 361 million euro and then things went downhill very fast. Several efficiency measures were taken, involvement in some projects (bio-diesel) was diminished, two rescue plan were rejected. If they don’t come up with a solution this weekend they will file bankruptcy on Monday…

Most news media told about the same story with largely the same words, so I guess they all originate from the same source. According to different sources the amount of subsidies was more than 140 million euro. This amount is without the income of green certificates (money given for the production of green electricity – not really a subsidy, but indirectly paid by the consumers).

The subsidies were detailed in the open letter to Minister vande Lanotte (Dutch), written by Jean-Marie Dedecker (founder of the political party LDD), is very detailed and gives a lot of background information that the media doesn’t bring. Not only a detailed list of the subsidies, but mostly background information about the many political connections between Electrawinds and (the entourage of) the Minister.

How did this happen? Electrawinds went in a short timespan from a successful example of green entrepreneurship to a financial disaster. When looking deeper, there were more darlings of the green economy that are in serious trouble or experienced it in the recent past (4Energy Invest, Enfinity and Thenergo) or stopped altogether (Photovoltech, V&R Solar Company and Solar Living).

People are still claiming renewable sources of energy don’t depend on subsidies anymore and are even cheaper than gas or nuclear. But the gruesome reality is that many of the green companies were dependent on the subsidies and had to file bankruptcy when the subsidies diminished. Take away the subsidies and the system starts to collapse.

Widespread support or widespread ignorance?

hogeraad

On November 20, the Dutch State got sued for not doing enough to avert dangerous climate change. Some weeks ago I downloaded the “draft version 7” of the summons, but in the meanwhile the final version (in Dutch) became available. There is quite some difference between the versions, but what stood out were two paragraphs that disappeared (translated from Dutch):

  1. This lawsuit further provides the opportunity to drag the discussion about climate change out of the domain of the one liners and emotions. The court room provides, maybe even as only public space in The Netherlands, the possibility to have the climate discussion on the basis of facts, evidence and nuanced position changes. A judicial decision and the considerations underlying it will, regardless of the outcome of the procedure, give the Dutch public better insight in the climate debate into how the evidence and the dangers should be valued.
  2. Plaintiffs also see it as a necessity because the Dutch public, at least a substantial part of it, doesn’t know much of for example the degree of warming which can not be avoided anymore, of the climatic and social causes that underlie these changes and of the unavoidable consequences and risks of that warming, or of for example, the nature, severity, duration and extent of the damage that is likely even greater in the case of dangerous climate change. In the absence of active information and warnings from the government, they don’t realize the risk. For the uninformed public the danger is once again not known because there is a delay of decades between cause and effect, therefor the damage is already done but not yet suffered (due later). These conditions contribute to the dangerous situation that was created, this is why one of the claims against the State focused on its obligation to inform the society and to warn of climate threat, so it gets clear what is at stake in The Netherlands if no adequate climate action is taken and supportive action from society can emerge.

Discussions on basis of facts and evidence, what’s not to like? To be honest, when I first read these paragraphs I was a bit surprised to find this in there. First, if there is one country in the world open for debate, it surely is The Netherlands. No courtroom necessary for having a debate there. Even (sparse) skeptic voices can be heard in the media. Second, it seems to me that the skeptics tend to focus more on the facts and the evidence than the alarmists. Last, but not least, it doesn’t fit in a “crowd” pleading action. They see the court summons as a democratic action, so it doesn’t sound good when stating that a substantial part of the Dutch doesn’t know much about it and still has to be “educated”. That is probably the reason why these two paragraphs didn’t survive the cut.

Subsequently, of the three demands to the judge the last one didn’t survive either (translated from Dutch):

To demand the State to inquire the Dutch population about the scientific knowledge and insights about the effects of the current global CO2 emissions on the climate and the associated risks.;

Probably ousted for the same reason. Yet, on their website that demand still stands. That is a bit schizophrenic. On the one hand they want to show the judge they have a widespread support among the Dutch people, yet on the other hand they show that a substantial part of the Dutch people still need to be convinced. Do they want to hide this fact from the judge? While admitting to the public that a substantial part of the public are ignorant and need to be informed?

What frightens me in these paragraphs (and also in general in the summons) is the incredible certainty in which a highly uncertain process is proclaimed. It makes me wonder if they really want a debate of just want to persuade people into the (one-sided) absolute truth they are declaring?

Chicken Littles have come to roost in COP19

gk

Sometimes a small lie, being told for whatever reason, can be taken to an new unexpected level by the reaction by those who take the lie for granted. It forms often the hilarious plot of comedies.

It happened also at the Warsaw summit. After decades of demonizing CO2, the developing countries took that for granted and at the COP19 summit they turned it up a notch. On November 20 the delegations of the G77 (a coalition of developing nations) walked out the summit because they didn’t see a commitment by the developed nations. The issue they had was on “loss and damage”. This was the, ahem, “money” quote (my emphasis):

Developing countries negotiating at COP19 have repeatedly stated that creating an international mechanism under UNFCCC to address loss and damage is the biggest expectation they have of the Warsaw meeting.

It was never a big secret that the developing countries want to be on the receiving end, but this is the clearest you can get.

Typhoon Haiyan lays at the base of this issue, brought forward as some countries that “already are suffering the deadly impact of climate change”. Therefor they want a compensation for this damage done by the developed countries, they obviously “caused” the whole shebang.

How did they got that far? The initial lie by the politicians and the media was that extreme disasters like droughts and storms are getting more powerful and/or more frequent due to global warming caused by our emissions. Probably in order to facilitate the political process to curb emissions. Whatever. The lie is still being perpetuated. For example, Ban Ki-moon was, speaking at Tallinn University in Estonia on November 16, claiming that:

[…] We have seen now what has happened in the Philippines. It is an urgent warning,” he said, “an example of changed weather and how climate change is affecting all of us on earth”. […]

[…] “We need action before it is too late,” said the UN chief, adding that a rise in temperatures would “affect us all. The threat is very real, and we all have to take responsibility to stop it.” […]

Probably putting in the (not warranted) certainty and the urgency to put pressure on the negotiators, but in the light of the lie it is easily understood as yet another guilt declaration.

Haiyan is attributed to global warming/climate change created by our emissions, a claim that is not supported by the scientific evidence. The IPCC said that there have been “no significant observed trends in global tropical cyclone frequency over the past century”. Yet, the UN ignored its own science report to claim this typhoon is somehow linked with our historical emissions, making it our fault. This little lie apparently came back to haunt them.

We shouldn’t be surprised that the developing countries use the tragedy of the Philippines to propose these additional demands. They are smart enough to come to the obvious conclusion that if it is true that our historical emissions caused current global warming (that is what the politicians and the press have been telling them all along) and as a consequence make Haiyan happen and/or worse, then follows that we did harm. You break it, you pay for it.

Can you blame them for trying? We made it really easy for them to come to that conclusion.

Overwhelming circumstantial evidence

justice

In the court summons of Urgenda (Dutch) the urgency based on their evidence is described. Interesting. I am always interested in the evidence. There was a time when I was looking closer for that “overwhelming” evidence of Catastrophic Anthropogenic Global Warming. I didn’t find hard evidence, but what I did find was an overwhelming repetition of assumptions.

This was no different: no hard evidence, but an accumulation building on a base assumption. It starts of course with this base assumption:

we emit CO2CO2 is a greenhouse gaswe are the main cause of the temperature increase

All nice and (much too) simple. Sure, CO2 is a greenhouse gas and the more in the atmosphere, the higher the temperature, other things being equal. Earth is a very complex system and elements it is composed of interact with each other. The big question is what the temperature impact of the human origin CO2 is in the real world. The IPCC (which their defense depends heavily on) even lowered the equilibrium climate sensitivity, going from 2 °C – 4.5 °C (best estimate of 3 °C) to 1.5 °C – 4.5 °C (no best estimate given). That is basically an uncertainty increase. But then they said they are even more sure now than ever before… That assumed certainty increase was being gloriously displayed in the court summons, mounting to the “overwhelming” evidence. The increased uncertainty was not acknowledged.

Temperatures went up in the last 100 years, but that doesn’t necessarily prove it is of human origin. And yes, the warming started in the 1850s, which coincide with the start of the industrial era. But it also coincide with the end of a cold period, the “little ice age”. When we came out of a cold period of 400-500 year, a 160 years of warming should not be that unusual. How to differentiate between the anthropogenic warming and a recovery from a cold period?

No mention that the “evidence” is obtained by climate models that don’t seem to be on par with reality. They act as if the climate models are correct and accurate. The pause in global temperatures learns us that there is a growing divergence between the models and observations and that should indicate we should have less confidence in them.

Do they have sound scientific evidence? Nope. Do they have a falsifiable theory? Nope. Do they have validated models? Nope. Were previous projections correct? Nope. Do they look at the different sides of the issue? Nope. In the end this is circumstantial evidence at best.

Where did all that uncertainty go?

iloveuncertainty

When reading more about the Urgenda lawsuit against the State on their action website (Dutch), I had one big question: how can they be so damn sure? Climate is a very complex system with many thousands, maybe even million variables, that can interact with each other. Yet they know it all, even 30 years in the future! In full detail! No doubts here.

While climate models can’t predict anything a couple months beforehand, scientists are surprised when again something happens that doesn’t fit the theory, climate sensitivity lowered, things like hurricanes and drought which were deemed as proof of human influence lowered in certainty,.. Yet, even with more uncertainty the climate of several decades ahead is still no mystery. Something is not right.

But in a way, I can understand it. I have been there. I once believed that the science was solid (although I thought that scientists exaggerated), the models were mature after so many years, we would end in 4 °C at the end of the century, my country would be changed dramatically. Melting polar ice, polar bears, omens that things were broken. I believed what others told me, so I was absolved in checking facts. Heck, if I would have been in other circles and had a climate blog, I could have well written things like that.

Now that absolute certainty seems unreal. So much sparse data relied upon. So many ifs, buts, woulds, mays and mights. And yet, all that uncertainty seems not to get through to the public. Leaving only the certainty.

Are Wind and Solar unaffordable or dirt cheap?

When looking at the article about the threats made by Aspiravi to tear down windmills when they get more than 10 years old (see previous post) I found on the same page two links to other stories titled Green power becomes unaffordable and Extremely low electricity prices because of wind and sun. It looks a bit comical and contradictory having links to those two articles on the same page. How can solar and wind be at the same time be unaffordable as well as giving extremely low electricity prices? Which one of the two is correct?

20131107DM_625

After digging a bit deeper I came to the conclusion that both are correct. The articles are about two different things.

Green power becomes unaffordable

This is about the yearly cost of subsidies for wind, solar and biomass energy in Flanders (about half the area of Belgium). This cost is rising and this year it will rise above 1 billion euro. I was really surprised by this number. I knew it was high, but I did not realize it was THIS high. This is for an energy source of about 7% of the electricity production. We only are with 6.4 million people in Flanders, so if one wants to mathematically spread this evenly over our population this would mean about €150 for every man, woman and child … only on subsidies. This only to get the extent clear (I know children don’t really pay individually and there is also the industry and businesses that pay for it).

In 2012 there was 626 million of subsidies for solar panels … for a share that for convenience mostly is rounded to zero! Biomass gets €223 million, wind on land another 69 million. Offshore wind is not taking into account because they get federal support (but which will be paid by the Belgian taxpayer anyhow).

That is a lot of money for an energy source that is, ahem, free and supposedly beats coal, gas and nuclear energy.

The cost will still grow until at least 2020. Until last year there was an oversubsidising. The subsidy rules changed drastically last year, but existing contracts will keep on being oversubsidized until the end of their contract.

Low prices because of wind and sun

The low prices are because of a bigger energy production by wind and solar on Sunday October 27, 2013. So it is basically a snapshot in time when wind and solar were optimal. But they don’t talk about the rest of the year when this for the largest part isn’t optimal. Wind and Solar are intermittent energy sources. They depend on the sun and the wind. No problem with that on that Sunday. Also not much of consumption on that day, so there was more energy production and not so much consumption, which means a surplus of energy. In the energy market this low demand and a high supply means lower prices.

Although it is true that there was a low price on the energy market because of the extra production, this will not affect the electricity bill of the ordinary consumers. They don’t buy the electricity on the price of the moment, but have a contract with a fixed price with their supplier. Basically, the target group of this newspaper has no connection with this lower price, only the big industry benefits from it. Therefor the title is misleading for this target group.

Also nothing could be done with this surplus energy. Our neighbor countries had the same problem, so exporting it was not an option. In this case it seemed not a big issue, but when the surplus is more extreme it could overload the grid with a potential brownout or blackout as a result.

Basically it is a not so good property of wind and solar was brought as a nice thing. Ignoring that fitting an intermittent energy source in a continuously working system is not for the faint hearted and can disrupt the grid completely. We have been there several times before (see for example too much green power).

Concluding: wind and solar can be dirt cheap and unaffordable at the same time.
Unaffordable because of sky high subsidies given to green energy (especially solar) and this billion is not the end of it. Even more to come in the near future.
Dirt cheap because of the intermittent nature they can produce a lot of energy at certain times which make it cheap on the energy market (only at that moment). But this doesn’t mean that the ordinary consumer will gain from it.

Please don’t cut our subsidies, we want more profits for our shareholders

Remember the statements that “wind energy is free” or “wind energy is cheaper than say coal or nuclear energy”. This week the mask has slipped. Aspiravi (a Belgian developer and manager of wind, biomass and biogas projects) threatens to tear down their wind turbines when they get more than 10 years old , because they will not get subsidies after this time for them anymore.

They claim that it was agreed they would receive green certificates for 20 years (the expected life time of a windmill), but at the end of last year this was reduced to 10 years. They claim that energy is cheap (tell that to those who can’t afford it anymore) and exploitation costs are high. Therefor some of the projects will not be profitable anymore. It is not clear which turbines they exactly mean. Existing contracts were not affected by the new policy, so I guess they mean only the new projects since the end of last year that will not be profitable within 10 years.

The Minister was not amused. She said that the certificates have the goal to compensate for the investment done in the projects, not for financing profits after this. Once the investment cost is recuperated, continue subsidizing the project is not a responsible thing to do.

aspiravi_savings

Let us look at the cold reality again. This little nasty pop-up can be found on the Aspivari homepage. It says [translated from Dutch]:

Go like the wind

Your savings have the wind from behind

Invest and win three times

Those who invest in wind energy projects of Aspiravi, win three times
One time in pure local energy, one time in a sustainable environment for your (grand)children, one time in an expected yearly return of 4 to 6%
No bank or saving account can do this.
Become shareholder of “Aspiravi Samen” and invest with us.

Aspiravi. Go like the wind.

So this is what they mean with “profitable”. They are advertising that their product is far better than any savings accounts. When I read this I can imagine why they have a problem with a limitation on subsidies. It eats away their high profit rate.

They are forgetting where the money actually comes from. It is from the taxpayers and consumers. It is basically just a redistribution of money, from the taxpayers and consumers to those who do invest in green energy.