Wednesday, September 21, 2016

GWPF Newsletter: EU Fails To Agree On Ratification Of Paris Climate Deal

Will Hinkley Point Nuclear Power Plant Make Enough Money?

In this newsletter:

1) EU Fails To Agree On Ratification Of Paris Climate Deal
Global Warming Policy Forum, 17 September 2016
2) Will Hinkley Point Nuclear Power Plant Make Enough Money?
Global Warming Policy Forum, 19 September 2016

3) China Struggling To Pay $Billions In Green Energy Subsidies
Reuters, 14 September 2016
4) Japan’s Shift To Renewable Energy Loses Power As Nation Returns To Coal and Gas
The Wall Street Journal, 14 September 2016
5) New Report Refutes EPA’S CO2 Endangerment Finding
ICECAP, 19 September 2016
6) Ivo Vegter: History Keeps Proving Prophets Of Eco-Doom Wrong
Daily Maverick, 19 September 2016

Full details:

1) EU Fails To Agree On Ratification Of Paris Climate Deal
Global Warming Policy Forum, 17 September 2016

The meeting of EU leaders in Bratislava (Slovakia) on Friday ended without any agreement on how to proceed with the Paris climate deal. 

Image result for EU Bratislava meeting 16 September

Despite claims by French President Francois Hollande that “all members of the EU are ready to ratify [the Paris deal] as fast as possible,” the Bratislava declaration of the 27 EU leaders ignored to mention the controversial issue altogether.

The EU’s inability to agree a joint statement on how to deal with the Paris agreement does not come as a surprise. Poland has made ratification conditional on EU assurances on investments in new coal-fired power plants.

“The ratification will be possible provided that Poland’s interests in relation to the European climate policy are secured,” the government said last week, adding that it wanted the Paris agreement to be ratified as soon as possible. 

The Polish government repeated its position on Friday, saying that it was ready to support ratification at the EU level if it wins unanimous support for its conditions from the bloc’s environment ministers.

In other words, as soon as possible sounds like the usual diplomatic lingo for not very soon.

2) Will Hinkley Point Nuclear Power Plant Make Enough Money?
Global Warming Policy Forum, 19 September 2016
John Constable, GWPF Energy Editor

The UK government has, after some delays, given approval to Hinkley C nuclear power station. However, and in spite of subsidies intended to offset risks arising from renewables policy, it is still not clear that the project can actually make money. It remains to be seen whether EDF has the courage to proceed.

Image result for hinkley point c

The British government has decided to approve the Hinkley C nuclear power station, subject to a number of conditions relating to the sale of EDF’s share. These are intended, it is said, to ensure that “the full implications of foreign ownership are scrutinised for the purposes of national security”. Future projects will have a similarly designed “special share” giving HMG the power to “ensure that significant stakes cannot be sold without the Government’s knowledge or consent”.

This gives the appearance of resolving the concerns aired when the Prime Minister delayed approval on the grounds of possible risks to national security arising from overseas investment in such infrastructure, particularly from China.

Unsurprisingly, this is nowhere near the end of the story. The British government has now given fair warning both to EDF and the Chinese government that it is only lukewarm about this project, and is unlikely to consider augmenting the fixed price, of £92.50/MWh, which will almost certainly be a large subsidy since wholesale prices are expected to be much lower than this for the majority of the project’s lifetime. If EDF were gambling on being able to obtain a little more support from the British consumer at a later date, from capacity payments perhaps, they should now realise that this is unlikely to happen. Is the deal as it stands sufficient to allow EDF and its partners to invest? Perhaps not.

The price per MWh, may look right now, but there is no guarantee that they be will able to sell enough of their output to turn that price into the required income.

Of course, it is widely assumed in much press comment that Britain is facing a crisis and desperate for electrical energy. This is not strictly speaking true. On current projections, the UK will have a vast renewable electricity generating fleet; 54.5 GW currently has planning permission, according to government’s own Renewable Energy Planning Database, and there is a further 10 GW of capacity still in the planning system. Together this capacity is sufficient to generate about 170 TWh of energy, more than 50% of current electricity consumption.

However, while this is a large volume, the renewable fleet is, for the most part, uncontrollable and cannot give a strong guarantee of delivering this energy at the rate it is required when it is required. Hinkley C, of course, can do exactly this.

But it is entirely conceivable that however vital Hinkley might be to security of supply as a provider of joules per second on demand, it would ultimately be selling volumes of electricity amounting to rather less than the 25 TWh that could be generated annually if it achieved its theoretical 90% load factor. With a strike price of £92.50/MWh that 25 TWh would generate income of about £2.3bn a year, half of which would be subsidy assuming that wholesale prices are roughly as they are today. That may seem fairly generous when set alongside the capital cost of £18bn, but cost overruns, Operations and Maintenance, and less than maximal sales may pare away much of this buffer. It would be interesting to know what actual load factor is needed for the project to be viable. Perhaps EDF is not really sure.

Lest this seems a needless anxiety, it should be recalled that 25 TWh really is a very large quantity of electrical energy, about 8% of current total consumption. Assuming that current UK demand does not rise and all the renewable plant described above is actually built, Hinkley would be capable of producing about a staggering 20% of the remaining annual demand. We can be sure that EDF is hoping that it would run undisturbed as a base-load provider, but the reality is that it could face stiff competition for the remaining market, not least from new generation gas turbines, which will be very cheap, and extremely flexible.

Much therefore depends on the scale of future UK demand for their electricity, and this is notoriously difficult to predict. Writing in 1984, two very competent analysts, Bending and Eden, foresaw consumption of between 452 and 666 TWh per year in 2020 (Richard Bending, Richard Eden, UK Energy: Structure, prospects and policies (Cambridge UP: Cambridge, 1984)). Current consumption is somewhat under 300 TWh. Things may change in the next four years, but it is unlikely that demand will rise to anything like those levels. Indeed, British Final Electricity Consumption (FEC) has been falling since approximately 2005, when it peaked at 349 TWh per year, and it has now returned to levels not seen since the early 1990s, and continues to fall.

The question therefore, is whether EDF can be confident that the UK’s consumption of electricity will recover sufficiently to give Hinkley a market large enough to turn the strike price into the required cash flow. Scandalous though the subsidy for Hinkley genuinely is, the truth is that it may not be remotely sufficient to make this power station viable in the policy-distorted market that is already a reality and is set to get worse.

3) China Struggling To Pay $Billions In Green Energy Subsidies
Reuters, 14 September 2016
Kathy Chen

China is struggling to pay billions of yuan in subsidies to renewable power generators following a rapid expansion of capacity, a planning agency official said this week.

Image result for China renewables subsidies cash

Wind and solar power capacity has grown faster than expected in the last five years because of preferential policies that include higher tariffs paid for cleaner electricity, as the world’s biggest coal consumer tries to encourage alternative forms of energy.

But Zhi Yuqiang, deputy director responsible for price regulation at the National Development and Reform Commission (NDRC), said developers face a possible shortfall of 60 billion yuan ($9 billion) in subsidy payments this year owed to them by the government.

The subsidy gap had already reached around 55 billion yuan by mid-year, he told an industrial conference in Beijing on Tuesday, according to a transcript of his remarks obtained by Reuters.

“As the scale of new capacity continues to expand, it is very possible that it will exceed 60 billion yuan by the end of the year.” […]

But after rapid first-half growth, solar firms are bracing for a slowdown in the third quarter, citing a June 30 cut in tariffs for new projects, the subsidy delays, as well as a shortage of grid capacity that kept 21 percent of wind power and 12 percent of solar power offline from January to June.

“Construction costs have definitely fallen because of the fall in module prices, but who can afford to build if you never get the subsidy payments?” said Maggie Ma, chief financial officer of Renesola, a solar manufacturer and project developer.

Full story

4) Japan’s Shift To Renewable Energy Loses Power As Nation Returns To Coal and Gas
The Wall Street Journal, 14 September 2016
Mayumi Negish

Five years after the disaster at the Fukushima Daiichi nuclear plant, the urgency to go green in Japan has faded. The drive toward ambitious targets for the use of renewable fuels has been slowed by resistance from utilities and concerns about the costs of renewable-energy projects at a time of cheap fossil-fuel imports, as well as the projects’ safety and environmental impact.

A case in point: Proponents of building a geothermal plant in the district where the Fukushima Daiichi meltdown occurred in 2011 ran into a wall of community opposition.

“This is just like when you brought us nuclear power, and it scares me,” Yutaka Kanno, president of the Hotel Hananoyu in Fukushima prefecture, said, according to minutes of a meeting with government officials and developers in 2012. “Prove that geothermal is safe. Then we can talk about exploratory drilling.”

Many reassurances later, developers plan to dig the first exploratory well this fall for a possible geothermal plant near Mount Bandai in Fukushima, about 130 miles north of Tokyo. Even if the results are promising, it would take about 10 years for a plant to start operating on the site.

Before the Fukushima accident, resource-poor Japan depended on nuclear plants for about 30% of its power.

Now, with nearly all of the 50-odd nuclear plants in the country still shut down in the wake of the accident, the country gets 1% of its energy from nuclear power. Cheap coal and natural gas, nearly all imported, have filled the void, together comprising more than 75% of Japan’s energy needs in the year ended in March, compared with 54% before the accident.

Fierce opposition to reopening nuclear plants and growing reliance on foreign energy sources would suggest a huge opening for renewables. Yet renewables made up just 14% of energy production in the year ended in March, up from 10% before Fukushima. That has advocates worried that the government’s goal of having renewables provide 22% to 24% of Japan’s energy needs by 2030 is slipping out of reach.

“Whether or not Japan embraces nuclear again, we need to reduce the role of petroleum-based fuels, and to do so, we need far more renewables than we’re on track to achieve,” says Shinichi Suzuki, secretary-general of the Japan Photovoltaic Energy Association.

The challenges renewables face are daunting. Regulatory hurdles and “not in my backyard” opposition hinder investment in wind and geothermal power, while a pullback in government-mandated prices for the purchase of solar power by utilities is hurting the growth of that sector.

Decades of development have built up Japan’s hydroelectric-power capacity, but there are few potential sites left for large-scale plants. Biomass plants struggle with low efficiency in transforming fuel into power. Sea wave and tidal power, which would seem like a natural energy source for the island nation, has been held back by the projected price tag and concerns about potential environmental damage.

Meanwhile, deregulation of the power market has driven utilities to seek low-cost fuels as they fight for customers in a country where electricity demand is projected to stay flat through 2020. Japanese companies now plan to increase the number of coal-burning power stations in the country by almost 50% in the next 12 years, even as the U.S. and Europe shun the emissions-heavy fuel.

Most of the growth in renewables has been in solar, but the industry is suffering. Solar farms and rooftop panels spread throughout Japan starting in 2012. That’s when the government began requiring utilities to pay a higher price for solar power than they charge consumers for electricity. That bolstered the companies that generate solar power and made solar more attractive for consumers, who can sell unused electricity generated by their panels to their utility.

But utilities quickly complained about the costs of protecting the power grid from imbalances in supply and demand caused by the variability of solar power. The government soon lowered the price the utilities have to pay for solar power, and the results have been jarring.

Bankruptcies in companies that generate solar power are on track to hit a record this year, totaling 31 in the first six months, up 24% from the first half of last year, according to Tokyo Shoko Research. And consumers are installing fewer panels on their homes. The generating capacity of solar panels sold in Japan in the year through March was down almost 25% from the previous year, the Japan Photovoltaic Energy Association says. Panasonic Corp.’s latest quarterly profit in its business segment comprising solar panels was half of what it was in the year-earlier quarter.

Full story

5) New Report Refutes EPA’S CO2 Endangerment Finding
ICECAP, 19 September 2016

The results of a new report invalidate each of the Three Lines of Evidence in The EPA’s CO2 Endangerment Finding.

On December 15, 2009, EPA issued its Green House Gas (GHG) Endangerment Finding, which has driven very significant and costly regulations beginning with CO2. Focusing primarily on the time period since 1950, EPA’s Endangerment Finding predicated on Three Lines of Evidence, claims that Higher CO2 Emissions have led to dangerously Higher Global Average Surface Temperatures.

Relevance of this Research
The assumption of the existence of a “Tropical Hot Spot (THS)” is critical to all Three Lines of Evidence in EPA’s GHG/CO2 Endangerment Finding.

Stated simply, first, the THS is claimed to be a fingerprint or signature of atmospheric and Global Average Surface Temperatures (GAST) warming caused by increasing GHG/CO2 concentrations[1]. The proper test for the existence of the THS in the real world is very simple. Are the slopes of the three temperature trend lines (upper & lower troposphere and surface) all positive, statistically significant and do they have the proper top down rank order?

Second, higher atmospheric CO2 and other GHGs concentrations are claimed to have been the primary cause of the claimed record setting GAST over the past 50 plus years.

Third, the THS assumption is imbedded in all of the climate models that EPA still relies upon in its policy analysis supporting, for example, its Clean Power Plan – recently put on hold by a Supreme Court Stay. These climate models are also critical to EPA’s Social Cost of Carbon estimates used to justify a multitude of regulations across many U.S. Government agencies. […]

Findings of the Research
These analysis results would appear to leave very, very little doubt but that EPA’s claim of a Tropical Hot Spot (THS), caused by rising atmospheric CO2 levels, simply does not exist in the real world. Also critically important, even on an all-other-things-equal basis, this analysis failed to find that the steadily rising Atmospheric CO2 Concentrations have had a statistically significant impact on any of the 13 critically important temperature time series data analyzed.

Thus, the analysis results invalidate each of the Three Lines of Evidence in its CO2 Endangerment Finding. Once EPA’s THS assumption is invalidated, it is obvious why the climate models they claim can be relied upon, are also invalid.

PDF of this Executive Summary here.

See full abridged 68 page report here

6) Ivo Vegter: History Keeps Proving Prophets Of Eco-Doom Wrong
Daily Maverick, 19 September 2016

The ability to make accurate predictions is a hallmark of good science. Predictions by environmental doom-mongers have proven to be wrong time and time again. No wonder most people no longer believe them.

Image result for GWPF failed predictions

If we do not reverse global warming by the year 2000, “entire nations could be wiped off the face of the earth by rising sea levels”, warned Noel Brown, a director of the United Nations Environment Programme, in 1989.

It is common cause that sea levels have been rising ever since the start of the Holocene at the end of the last Ice Age, about 11,700 years ago. Throughout the 20th century, tide gauge data has shown this rise to be fairly steady at about 1.5mm/year, and largely unaffected by changes in temperature or atmospheric carbon dioxide levels. Since 1993, satellite altimetry has determined a fairly constant sea level rise of just over 3mm/year. However, it is far from clear whether this represents an acceleration or an artefact of how sea level is measured with respect to surrounding land.

2016 paper by Australian scientists Albert Parker and Cliff Ollier suggests that the altimetry record suffers from errors larger than its trends, and “returns a noisy signal so that a +3.2 mm/year trend is only achieved by arbitrary ‘corrections’”.

“We conclude that if the sea levels are only oscillating about constant trends everywhere as suggested by the tide gauges, then the effects of climate change are negligible,” they write, “and the local patterns may be used for local coastal planning without any need of purely speculative global trends based on emission scenarios. Ocean and coastal management should acknowledge all these facts. As the relative rates of rises are stable worldwide, coastal protection should be introduced only where the rate of rise of sea levels as determined from historical data show a tangible short term threat. As the first signs the sea levels will rise catastrophically within a few years are nowhere to be seen, people should start really thinking about the warnings not to demolish everything for a case nobody knows will indeed happen.”

Clearly, history proved Noel Brown wrong.

In 2002, George Monbiot urged the rich to give up meat, fish and dairy, writing: “Within as little as 10 years, the world will be faced with a choice: arable farming either continues to feed the world’s animals or it continues to feed the world’s people. It cannot do both.”

In 2002, 908-million people worldwide suffered hunger. Ten years later, that number had declined to 805-million, according to the UN Food and Agricultural Organisation. Because of continued population growth, this nominal decrease represents a much larger decline in the prevalence of undernourishment, from 18.2% of the world’s population in 2002 to 14.1% in 2012. Hunger remains steadily on the decline. Famines, once so common, are rare nowadays.

Clearly, history proved George Monbiot wrong.

In 2008, the US television channel ABC promoted an apocalyptic “documentary” called Earth 2100, hosted by Bob Woodruff. The film cites a host of scientists, including such perennial alarmists as James Hansen, formerly head of Nasa’s Goddard Institute for Space Science, and John Holdren, the US science czar who in the 1970s thought population control might be necessary to ward off mass starvation (see Prophets of doom in high places).

The show depicts the world at various times in the future, leading up to a collapse of civilisation “within this century, and perhaps your lifetime”. By 2015, it said, agricultural production would be dropping because of rising temperatures and the number of malnourished people “just continually grows”. We’ve already seen that the latter prediction proved to be false. Agricultural output also remains on a strong upward trend worldwide, and most of that is because of rising productivity, and not a rise in land use, irrigation, labour or other capital inputs.

A carton of milk would cost $12.99 by 2015, the film said, and a gallon of fuel would cost over $9. In reality, milk cost $3.39 and fuel cost $2.75 in 2015. Much of New York and surroundings would be inundated by rising sea levels, they said. Below is their 2008 map, and a current satellite view of New York from Google Maps. I’m no aerial surveillance analyst, but I don’t see any evidence that half of New York is under water.

Clearly, history proved Bob Woodruff and his famous scientific sources wrong. [...]

The ability to make accurate predictions is a hallmark of good science. Conversely, making false predictions implies either that a statement is not based on science, or that it is based on bad science.

So why is it that we continue to believe environmental doom-mongers, even though history has proven them wrong time and time again?

Oh, wait. It turns out we don’t believe them. Almost 10-million voters in a huge United Nations poll have ranked climate action dead last out of 16 concerns – below even the phone and internet access that all respondents would have enjoyed anyway if they were able to complete the online poll.

Those are the fruits of constant, shrill, exaggerated alarmism. Get proven wrong by history often enough, and four out of five ordinary people will stop believing you. And good for them, too. Perhaps environmentalists should mind the environment instead of trying to rule the world.

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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

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