Thursday, July 20, 2017

GWPF Newsletter: The Truth About Green Subsidies








In this newsletter:

1) As Japan Cuts Green Subsidies, Up To 100 Japanese Solar Firms Could Go Bust This Year
PV Tech, 18 July 2017

2) As Green Subsidies Dry Up, Ontario Wind Turbine Factory Closes, Shedding Hundreds Of Jobs
Toronto Sun, 18 July 2017



3) Tesla’s Hong Kong Sales Collapse To Zero After Tax Breaks Are Canceled
Motor1 News, 11 July 2017

4) Green Cronyism Gone Wild: It Looks Like The State Of California Is Bailing Out Tesla
Business Insider, 17 July 2017

5) Macron’s Climate Pitch To Trump Earning Skepticism
The Washington Times, 18 July 2017

6) Lord Turnbull & The Bishop Of Chester On Reforming The Electricity Market
House of Lords, 17 July 2017 

7) Doomsday Activist Who Claimed Humans Will Be ‘Burned Alive’ By Climate Change Is Shot Down By Scientists
The Mirror, 17 July 2017 


Full details:

1) As Japan Cuts Green Subsidies, Up To 100 Japanese Solar Firms Could Go Bust This Year
PV Tech, 18 July 2017
 
Up to 100 solar PV firms in Japan could face bankruptcy this year, with more than double the number of firms going bust in the first half of this year than the same period in 2016.


 
According to corporate credit research company Teikoku Databank, which surveys companies across various industries and has produced its third report on solar PV company bankruptcies, 50 companies in Japan’s solar sector have already gone out of business in the first six months of 2017.
 
While the market overall has rapidly expanded from the launch of the feed-in tariff (FiT) in July 2012, Teikoku Databank acknowledged that there has been a slowdown in deployment in the past couple of years as the government successively made cuts of 10% or more on an annual basis to the premium prices paid for solar energy fed into the grid.
 
The credit agency said “bankruptcy of solar-related contractors is rapidly increasing”, with solar panel manufacturers also affected. In the first half of 2016, just 23 companies went bankrupt, with this year’s first half’s showing of 50 bankruptcies representing a 2.2x increase. Teikoku Databank forecast that 100 firms in total could go under during 2017.
 
Another research firm, Tokyo Shoko Research, quoted in Japan Today in 2016, gave a slightly higher figure, 31, for the number of H1 2016 bankruptcies.
 
Full story
 
2) As Green Subsidies Dry Up, Ontario Wind Turbine Factory Closes, Shedding Hundreds Of Jobs
Toronto Sun, 18 July 2017




TILLSONBURG - The loss of 340 jobs at a factory that makes blades for wind turbines could be harbinger of troubles ahead in Ontario’s green-energy industry, a leading analyst says.
 
Siemens Canada announced Tuesday it’s closing its Tillsonburg plant, one of four Ontario green-energy factories set up under a controversial, multi-billion-dollar deal with Korean industrial giant Samsung.
 
The closing of one of the town’s largest employers came after weeks of nervous speculation.
 
But energy analyst Tom Adams said Ontario’s green-energy industry could be in for a rough ride if it doesn’t lay its hands on orders from outside Ontario, arguing the provincial market is saturated with wind and solar electricity brought online since the Liberal government plunged headlong into green energy in 2009.
 
“I think it was always pretty obvious that whatever jobs were going to arise from the Green Energy Act were all temporary or almost all temporary,” Adams said, referencing the provincial law that paved the way for big wind farms in Ontario under contracts paying energy giants more than consumers pay for power.
 
“Samsung had no history in renewable energy before they came to Ontario. They came only for the subsidies, and when the subsidies dry up, they’ll disappear as quick as they landed,” said Adams, an independent energy and environmental advisor and researcher.
 
In 2010, four plants to make parts for wind and solar energy farms were set up under the Samsung deal between the company and the province to generate power for Ontario and create green-energy jobs. ...
 
With so much power now available, the government has been accused of dumping green energy and has come under fire for skyrocketing electricity prices that have essentially doubled over the last decade in Ontario.
 
The government’s about-face on renewable energy project, halting further large buys, was the beginning of the end, said worker Lee Blair of London.
 
Full story
 
3) Tesla’s Hong Kong Sales Collapse To Zero After Tax Breaks Are Canceled
Motor1 News, 11 July 2017
 
Not a single Tesla was sold in the country in April.


 
Following Hong Kong’s decision to reduce incentives for electric vehicles, sales of Tesla vehicles in the country plummeted. The local government slashed a tax break for electric vehicles on April 1, which resulted in no Model S or Model X deliveries during the whole month. Data from Hong Kong’s Transportation Department also reveals only five privately owned electric vehicles were sold in May.
 
For a comparison, in March alone a total of 2,939 Tesla cars were registered, almost double the result of March 2016. During the first quarter of this year, new registrations were approximately 3,700.
 
While this collapse might seem like an insignificant local phenomenon, it actually affects the global sales of the company. During Q1, Tesla registered record sales of more than 25,000 units globally, but in the next three months deliveries fell to just over 22,000 as a result of Hong Kong’s slump. Also, the collapse reveals once again how sensitive the automaker’s performance can be to government incentive programs. However, Tesla does not agree.
 
“Tesla welcomes government policies that support our mission and make it easier for more people to buy electric vehicles, however, our business does not rely on it,” Tesla said in a statement quoted by Market Watch. “At the end of the day, when people love something, they buy it.”
 
Full story
 
See also: Denmark Ends Green Incentives, Electric Car Sales Collapse

4) Green Cronyism Gone Wild: It Looks Like The State Of California Is Bailing Out Tesla
Business Insider, 17 July 2017

Wolf Richter
 
The California state Assembly passed a $3-billion subsidy program for electric vehicles, dwarfing the existing program. The bill is now in the state Senate. If passed, it will head to Governor Jerry Brown, who has not yet indicated if he’d sign what is ostensibly an effort to put EV sales into high gear, but below the surface appears to be a Tesla bailout.
 


Tesla will soon hit the limit of the federal tax rebates, which are good for the first 200,000 EVs sold in the US per manufacturer beginning in December 2009 (IRS explanation). In the second quarter after the manufacturer hits the limit, the subsidy gets cut in half, from $7,500 to $3,750; two quarters later, it gets cut to $1,875. Two quarters later, it goes to zero.
 
Given Tesla’s ambitious US sales forecast for its Model 3, it will hit the 200,000 vehicle limit in 2018, after which the phase-out begins. A year later, the subsidies are gone. Losing a $7,500 subsidy on a $35,000 car is a huge deal. No other EV manufacturer is anywhere near their 200,000 limit. Their customers are going to benefit from the subsidy; Tesla buyers won’t.
 
This could crush Tesla sales. Many car buyers are sensitive to these subsidies. For example, after Hong Kong rescinded a tax break for EVs effective in April, Tesla sales in April dropped to zero. The good people of Hong Kong will likely start buying Teslas again, but it shows that subsidies have a devastating impact when they’re pulled.
 
That’s what Tesla is facing next year in the US.
 
In California, the largest EV market in the US, 2.7% of new vehicles sold in the first quarter were EVs, up from 0.4% in 2012, according to the California New Dealers Association. California is Tesla’s largest market. Something big needs to be done to help the Bay Area company, which has lost money every single year of its ten years of existence. And taxpayers are going to be shanghaied into doing it.
 
To make this more palatable, you have to dress this up as something where others benefit too, though the biggest beneficiary would be Tesla because these California subsidies would replace the federal subsidies when they’re phased out.
 
It would be a rebate handled at the dealer, not a tax credit on the tax return. And it could reach “up to $30,000 to $40,000” per EV, state Senator Andy Vidak, a Republican from Hanford, explained in an emailed statement.
 
This is how the taxpayer-funded rebates in the “California Electric Vehicle Initiative” (AB1184) would work, according to the Mercury News:
 
The [California Air Resources Board] would determine the size of a rebate based on equalizing the cost of an EV and a comparable gas-powered car. For example, a new, $40,000 electric vehicle might have the same features as a $25,000 gas-powered car. The EV buyer would receive a $7,500 federal rebate, and the state would kick in an additional $7,500 to even out the bottom line. 
 
And for instance, a $100,000 Tesla might be deemed to have the same features as a $65,000 gas-powered car. The rebate would cover the difference, minus the federal rebate (so $27,500). Because rebates for Teslas will soon be gone, the program would cover the entire difference – $35,000. This is where Senator Vidak got his “$30,000 to $40,000.”
 
The Tesla Model 3 would be tough to sell without the federal $7,500. But this new bill would push Californian taxpayers into filling the void. It would be a godsend for Tesla.
 
Full post
 
5) Macron’s Climate Pitch To Trump Earning Skepticism
The Washington Times, 18 July 2017
Valerie Richardson
 
French President Emmanuel Macron appears confident that he can coax President Trump back into the fold on the Paris climate agreement, but those who oppose the international accord aren’t sweating it.
 
Why? Because Mr. Trump has made it clear he won’t rejoin the emissions-cutting pact without having it restructured so as not to put the United States at a competitive disadvantage with the rest of the world.
 
That restructuring hasn’t happened, but Mr. Macron told the French newspaper Journal du Dimanche after last week’s face-to-face meeting that “Donald Trump listened to me. He understood the reason for my position, notably the link between climate change and terrorism.”
 
The French leader’s remarks about his charm offensive made headlines. “I’ve won Trump over on climate change, says Macron,” trumpeted The [U.K.] Times on its front page.


 
“He understood the sense of my approach,” Mr. Macron said in the Monday report. “He told me that he would try to find a solution in the coming months. We talked in detail about what could enable him to come back into the Paris accords.”

Still, Myron Ebell of the Trump environmental transition team said he wouldn’t advise anyone to hold their breath waiting for the White House to re-enter the nonbinding pact.
 
“President Trump was quite clear in his [June 1] speech that he would be willing to reenter the Paris Climate Treaty on terms that are in our national interest,” said Mr. Ebell, director of the Center for Energy and Environment at the Competitive Enterprise Institute, in an email.
 
That would mean renegotiating the U.S.’ nationally determined contribution along the lines of what was granted to China, he said, meaning “we would commit to increase our greenhouse gas emissions until they peak and then decline according to our economic needs.”
 
Benny Peiser, director of the climate change-skeptical Global Warming Policy Forum in London, said Mr. Macron’s claim “has been both overhyped and misinterpreted by the news media.
 
“In reality, it would appear that President Trump may have swayed Macron to change his position on the UN climate deal,” said Mr. Peiser in an email.
 
The leaders of France, Germany and Italy responded to Mr. Trump’s June 1 exit from the Paris agreement with a rare joint statement ruling out any restructuring.
 
“We deem the momentum generated in Paris in December 2015 irreversible, and we firmly believe that the Paris Agreement cannot be renegotiated since it is a vital instrument for our planet, societies and economies,” said the statement.

After meeting last week with Mr. Trump in Paris, however, the newly elected French president may be rethinking his opposition.
 
“In short, my assessment is that President Macron may be preparing the ground for giving up the EU’s rejectionist position about the Paris agreement,” said Mr. Peiser. “After all, this, I believe, is the only likely option to bring back the U.S. administration to the negotiating table — and even this scenario looks more like a utopian dream at the present time.”
 
Mr. Trump reversed the Obama administration’s decision to sign onto the accord, which seeks to hold the global temperature increase this century to “well below” 2 degrees Celsius above pre-industrial levels “through nationally determined contributions.”
 
Climate Depot’s Marc Morano said that there will never be a reason for the Trump administration to rejoin as long as the premise remains that “only a U.N. central planning agreement can save humanity.”
 
“President Trump can use his negotiation charm to dangle the prospect of a renegotiated deal, but it is very clear that the U.S. is out and will stay out under his presidency,” Mr. Morano said in an email.
 
Climate Progress editor Joe Romm was also a skeptic, at least when it came to any chance of Mr. Trump re-entering the pact.
 
“I hope Macron isn’t so easily duped,” said Mr. Romm in a Tuesday post. “In reality, there is no substance supporting any of these stories. They are all based on Macron’s belief that Trump actually listened to his arguments in favor of the Paris agreement and was persuaded by him — whereas Trump’s entire history, and his public remarks, suggest otherwise.”
 
Full story
 
6) Lord Turnbull & The Bishop Of Chester On Reforming The Electricity Market
House of Lords, 17 July 2017 
 
House of Lords debate on the Report from the Economic Affairs Committee The Price of Power: Reforming the Electricity Market — House of Lords 17 July 2017
 
Lord Turnbull (CB)


 
My Lords, energy and climate policy displays a great deal of groupthink and a reluctance to challenge long-held assumptions, even when the evidence changes. So it was refreshing to work on this report, which questions many of those assumptions.
 
As has been pointed out, the report identified two main failings in current energy policy. First, we have moved rapidly from a framework which allowed market forces to shape the energy market to one where virtually every major investment decision is taken bureaucratically. In the process, we have lost almost completely the idea of a merit order in which different technologies can compete.
 
Secondly, successive Governments have paid lip service to the trilemma of three objectives: security, affordability and carbon reduction. But in the Miliband/Huhne/Davey—and even Clark—era, one of those objectives consistently trumped the other two. Whenever there was a conflict, carbon reduction, in particular through the promotion of renewables, has prevailed. Other objectives, such as security and affordability, but also air quality and land use, have taken a back seat. The promotion of renewables has been accorded not one but two major privileges: not just subsidies of many billions of pounds but the first right of dispatch, so that, if at any time there is surplus supply of electricity, other fuel sources must yield. As a result, the economics of gas-fired capacity has been shot to pieces, and very little such capacity has been created, at a time when coal and nuclear output will be declining. While some premium can be justified for renewables on account of their low carbon intensity, inadequate account has been taken of the cost to the system of providing back-up capacity to cover intermittency.
 
As a result, the margin of spare capacity has been severely eroded. I do not, however, believe that the lights will actually go out. The risk will manifest itself in a different way. In response to this situation, the Government have cobbled together a range of measures, including the capacity mechanism. The criticism is that they will prove costly; have unwanted consequences, such as the promotion of diesel generation; and will encourage old fossil-fuelled stations to remain on the grid rather than encourage investment in new, efficient gas-fired stations.
 
Full speech
 
The Lord Bishop of Chester


 
My Lords, as one of the few non-members of the committee speaking in the debate, I gladly pay tribute to its report, although it is not for our comfort. I think it makes it clear that the supply of electricity has become a very complex matter. For me, the central question is whether this complexity provides a richer range of policy options in relation to our electricity supply or whether it points to a rising level of confusion and risk.
 
Why is a bishop — I say to the noble Lord, Lord Turnbull, that bishops are always curates at heart — interested in this area? I have a scientific background and have always been drawn to issues where science and public policy interact. Thirty years ago, I was concerned that the then “dash for gas”, as it was called, in electricity generation on the back of new supplies from the North Sea was a poor and profligate use of a flexible fuel and chemical feedstock that would be available for only a limited duration. All sorts of estimates were being made about when “peak oil” would be reached and about the ever-escalating price of oil and gas. But how wrong I was, and indeed how wrong most — I might almost suggest all—forecasts were. The world is now awash with cheap oil and gas for the foreseeable future.
 
The unimaginable has come to pass.
 
Subsequently, and especially in my years as a bishop, I have become concerned about the rising cost of electricity and its differential impact upon those who, by a socioeconomic judgment, are among the poorest in our society. Levels of fuel poverty have been stubbornly high, underpinned by rises in the cost of electricity.

The report describes how the cost of electricity in the UK has risen over the past decade, from being among the cheapest in Europe to much higher comparative levels for everybody.
 
Full speech
 
7) Doomsday Activist Who Claimed Humans Will Be ‘Burned Alive’ By Climate Change Is Shot Down By Scientists
The Mirror, 17 July 2017 
 
A controversial article appearing in the New York magazine has drawn criticism from the scientific community.
 
Climate change is a huge threat facing mankind, but to what extend will it bring about the end of civilization?
 
One activist has drawn criticism from the scientific community by claiming it will render the planet uninhabitable and bring about “rolling death smogs” of pollution.
 
David Wallace-Wells wrote an article, titled The Uninhabitable Earth in New York magazine, and claimed the apocalypse could come about very quickly indeed.
 
“Climate-change skeptics point out that the planet has warmed and cooled many times before, but the climate window that has allowed for human life is very narrow, even by the standards of planetary history,” Wallace-Wells writes.
 
“At 11 or 12 degrees of warming, more than half the world’s population, as distributed today, would die of direct heat. Things almost certainly won’t get that hot this century, though models of unabated emissions do bring us that far eventually.”
 
He outlines common theories, such as the release of carbon trapped in ice, food shortages due to crop failure and the ever-increasing amount of harmful particles in the smog pollution that blankets cities.
 
But the article has been called “irresponsible” and “nonsense” by commentators taking to social media.
 
Full story


The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.

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