Tuesday, October 3, 2017

GWPF Newsletter: Could Germany’s Green Energy Disaster Bring Down Angela Merkel?

Germany’s Energiewende Blowin’ In The Wind

In this newsletter:

1) Could Germany’s Green Energy Disaster Bring Down Angela Merkel?
P Gosselin, No Tricks Zone, 29 September 2017
2) Germany’s Energiewende Blowin’ In The Wind
Petroleum Economist, 29 September 2017
3) London Seeks Ban Of Renewable Energy Blamed For Air Pollution
The Times, 29 September 2017
4) GWPF: Government Support For Wood-Burning Partly To Blame For Rising Smog Threat
Global Warming Policy Forum, 24 January 2017
5) Forget This Spin Too: Solar PV Is Not On The Brink Of Being Subsidy Free
GWPF Energy, 26 September 2017

Full details:

1) Could Germany’s Green Energy Disaster Bring Down Angela Merkel?
P Gosselin, No Tricks Zone, 29 September 2017

The split between Angela Merkel’s two potential junior coalition parties over Germany’s green energy disaster seems to be unsolvable. That could mean that the days of Angela Merkel may be numbered, and those of the Energiewende as well.

Angela Merkel’s grand coalition government with the opposition SPD socialist party took a massive beating in last Sunday’s election, with both her CDU/CSU party and the coalition partner SPD socialist party coming in at post-war historic lows.

Since then the SPD has announced it is no longer interested in continuing the grand coalition and instead will take the helm as the opposition force. The comfy, low-opposition government is over. This has got Merkel scrambling to find new partners to form a new government. Her only option available: forming a coalition with the business-friendly FDP free democrats – and the environmentalist Greens. That is not going to be easy by any means.

Merkel potential coalition partner cold on subsidies for renewables

Merkel of course would have no problems governing together with the greens, and the massive state media apparatus is already promoting it with abandon.
But there are wide chasms of difference between the potential coalition parties on a number of issues, especially on issue of renewable energy subsidies.

Yesterday at the leftist, Berlin-based Tagesspiegel here, FDP party boss Christian Lindner left a commentary where he “demands the end of the EEG feed-in reform act“. According to Lindner, Germany’s focus has been “religiously excessive” on climate protection “instead of on price and supply stability“.

For too long have the consumers and industry been sacrificed at the alter of Climatism, and done so with no results.

“Green energies have failed”

According to Lindner:

The project of the century Energiewende [transition to green energies] has failed. None of the agreed targets will be reached. Climate protection is stalled, energy prices are rising and they are burdening us as electricity consumers, just as they are the industry and middle class. And not least of all it is becoming increasingly difficult to guarantee a secure power supply during the winter months.”

Worse than former communist East Germany

Lindner adds that even Communist East Germany could not have designed the system to be worse. Lindner then blasted the country’s high electricity prices and their detrimental impact on German competitiveness, writing that many companies have left the country.

Moreover conventional power plants that are forced to run part time are no longer profitable, Prices he says, will continue to rise and that there is no end in sight.

24 billion euro annual burden, time to pull the plug

Lindner also claims that government reforms to the feed-in act have “gone out of control” and that this is burdening the German consumers to the tune of 24 billion euros annually, or more than 300 euros a year for a family of four.

Lindner is calling for scrapping the current feed-in act and replacing it altogether from scratch, saying what is needed is a Europe-wide energy policy and power grid. Secondly he says that renewable energies must stop being subsidized and that Europe should take its time to reduce CO2.

According to Lindner:

The EEG [feed-in act] no longer works and it is time to pull the plug.

To the contrary, the Greens are demanding that green energies be expanded even more rapidly and that diesel engines be banned by 2030. The split between the two potential junior coalition parties seems unsolvable, so much so that German flagship daily Die Welt here wrote that Lindner has even poured cold water on the idea of a CDU/CSU/Green/FDP coalition government. That could mean that the days of Angela Merkel may be numbered, and those of the Energiewende as well.

Full post

2) Germany’s Energiewende Blowin’ In The Wind
Petroleum Economist, 29 September 2017

Germany's federal elections on 24 September saw no changes at the top as Angela Merkel retained the Chancellorship. But the nature of the country's future energy policy will be shaped by the horse trading currently taking place to decide which parties will be in the ruling coalition.

To govern, Merkel's centre-right Christian Democratic Union needs to form a coalition with one or two of a handful of smaller parties. That involves trying to get politicians with diverse views on board—probably the leaders of the Greens and the Free Democratic Party.

Those talks have barely started, with the CDU still struggling to agree the common policy platform with its sister party in Bavaria, the Christian Social Union. That needs to happen before it can move on to tackling other even more complex partnerships. The CDU/CSU alliance took 33% of the vote, making it the largest group in parliament.

Cem Ozdemir, co-leader of the Greens, said after the election that the party would focus on climate change in any coalition talks. The Greens will be pushing to accept the Paris climate change agreement in its entirety, remove fossil fuels from the German energy mix as fast as possible and speed up the transition of its car fleet to electric vehicles. The Greens want a stop to both coal power and gasoline vehicles by 2030, and introduce a carbon price floor.

The Free Democratic Party, meanwhile, although supporting the Paris pact, has a more flexible view on how it will be implemented. The FDP regards fossil fuel energy sources as indispensable for the foreseeable future. The party supports the continued use of diesel, despite recent scandals—notably one involving Germany's Volkswagen— regarding under-reporting of harmful emissions from diesel vehicles. It doesn't support a carbon price floor.

Merkel has cultivated an image as a champion of climate change measures, though Germany's performance in hitting its climate change targets has not been stellar.

The government's long-term aim is to cut emissions by 80-95% below 1990 levels by 2050 and it has also set an ambitious interim target of a 40% reduction by 2020. However, several forecasters expect that it will miss that—attaining a reduction of only around 30%.

Germany may also fail to meet its EU target of obtaining 18% of its energy from renewable sources by 2020.

Political power

But the shifting sands of German politics may yet help speed up the greening of German power. The centre-left Social Democratic Party, the country's second-largest force, was a key player in the previous coalition. This time, it has already ruled itself out of any coalition, after faring poorly in the election—its share of the vote fell by 5.2% from its 2013 result, down to 20.2%.

The SPD was a strong voice in government in support of the thousands of workers whose jobs are reliant on German power plants fed by coal, including heavily polluting lignite. Without that SPD support, a new government could find it easier at the party-political level to close those plants faster.

However, a rapid rundown of coal-fired power would still leave the problem of how to deal with a wave of unemployment — several tens of thousands of jobs would be at risk in the lignite industry and in its supplier companies. Many of those are in the working class heartlands of the far-right Alternative for Germany party, which performed better than expected in the elections. Merkel has ruled out doing any deals with AfD, but can't afford to ignore those who voted for them, or who might do so in the future.

It would also be a monumental task. In early September, Germany's deputy economy minister Rainer Baake said Germany would need to close down 25 gigawatts of coal-fired power capacity by 2030, or around half of its current capacity, if it is to meet targets under the Paris agreement. That would trigger massive social change and put strain on renewable energy.

Full story

3) London Seeks Ban Of Renewable Energy Blamed For Air Pollution
The Times, 29 September 2017
Ben Webster

Wood burning is set to be banned in some urban areas to reduce air pollution under proposed restrictions that would be the strongest in Europe.

Sadiq Khan, the mayor of London, is seeking powers to prohibit all burning of wood in parts of the capital with poor air quality. He also wants tighter curbs on wood-burning stoves, with only low- emission versions allowed to stay on sale.

Wood-burning stoves are increasingly popular in middle-class homes and hotels, with 1.5 million across Britain and 200,000 sold annually. Old fireplaces have also been opened up in many houses and can cause greater pollution than stoves. Wood burning is most popular in the southeast, where it is done in 16 per cent of households compared with less than 5 per cent in northern England and Scotland.

Between a quarter and a third of all fine particle pollution in London comes from domestic wood burning. During a period of very high air pollution in January, it contributed half the toxic emissions in some areas of the city, King’s College London found.

Many people have switched to wood burning because they think it is greener than using gas boilers. A wood stove can emit billions of tiny toxic particles that pollute the surrounding area.

Mr Khan wrote yesterday to Michael Gove, the environment secretary, seeking powers to tackle sources of air pollution as soon as possible, including stoves, machinery on building sites, such as diesel-powered diggers, and boats on the River Thames. At a meeting in July with Mr Khan, Mr Gove requested details of the powers that the mayor would need to tackle air pollution, which causes 9,500 early deaths a year in London and 40,000 across Britain.

Full story

4) GWPF: Government Support For Wood-Burning Partly To Blame For Rising Smog Threat
Global Warming Policy Forum, 24 January 2017

In response to the London smog alert, the Global Warming Policy Forum (GWPF) is calling on the Government to abolish all support for diesel engines and wood-burners which are posing a growing threat to the health of urban populations.

Unusually high amount of domestic wood burning, some of which are subsidised under the Renewable Heat Incentive, has been partly blamed for the latest smog alarm.

Wood-burning has been advocated and incentives by the Government as a policy to decarbonise the residential sector and has been increasing rapidly in recent years, largely due to a combination of green subsidies and climate campaigning.

As a result, there has been a deterioration of air quality in many cities which has contributed to the current smog hazard in London. Like wood-burning stoves, diesel engines have also been specifically encouraged by EU, and UK policies, in the interests of reduced CO2 emissions.

In a recent report, the Royal College of Physicians warned that ‘the increasing popularity of wood burning for heating, in part due to policies to reduce CO2 emissions, risks undoing some of the air quality improvements that have resulted from widespread adoption of gas for domestic heating.’

“The government has a responsibility to reduce the negative impact of wood-burning on health and should now abolish any support which is increasing the risk to the health and well-being of urban populations,” said Dr Benny Peiser, director of the GWPF.

5) Forget This Spin Too: Solar PV Is Not On The Brink Of Being Subsidy Free
GWPF Energy, 26 September 2017
Dr John Constable: GWPF Energy Editor

Hot on the heels of the uncritical media fuss around the recent Contracts for Difference awarded to offshore wind (for comment see “Forget the Spin: Offshore wind costs are not falling”) comes an equally misleading set of headlines falsely claiming that Solar Photovoltaic generation is on the brink of operating without market distortions and coercions. The truth, unsurprisingly, is quite otherwise.

Claire Perry MP, Minister of State for Climate Change and Industry, will today cut the ribbon at the Clayhill Solar Farm, a project that the Department of Business, Energy and Industrial Strategy (BEIS) has welcomed with a striking press statement entitled “Subsidy Free Solar Comes to the UK”.

Naturally enough this has generated a good deal of supportive press coverage, but, like the recent excitement about the low prices awarded to offshore wind, it sounds too good to be true and in fact turns out to be so.

The truth is that while the Clayhill scheme does include 10 MW of solar panels, its economic heart is comprised of five BYD batteries, apparently with a peak output of 6 MW and a storage capacity of 6 MWh of electrical energy.

These batteries will seek lucrative retaining contracts to provide system balancing services, probably under the Capacity Mechanism. Economically, Clayhill is not a “subsidy free” solar system, but a battery storage project providing rapid response power and using onsite solar as one of its charging options.

Thus, contrary to the absurd PR coming out of BEIS, Clayhill is in no respect an indicator of incipient economic maturity in the solar sector, and underneath the silly headlines parroting BEIS’s nonsense even the site’s developers and the Solar Trade Association both give the lie to the exaggerations.

Mr Shine, chairman of Anesco, which owns Clayhill, has very honestly admitted to The Times that solar farms are “still not economically viable” (“Clayhill, Britain’s first subsidy-free solar farm, revives fading industry”), and in the FT  he is unequivocal:

“‘It [the Clayhill project] wouldn’t pay with solar by itself at the moment . . . it needs the storage as well,’ said Mr Shine.”

Elsewhere in the FT’s story the Solar Trade Association (STA), alert to the possibility that the BEIS hype might put an end to any hopes of a renewal of subsidies to solar in the UK, is quoted as saying:

“We absolutely applaud them [Anesco] but government shouldn’t then assume the industry is away — it isn’t […] It is only going to be exceptional projects [that are built subsidy free].”

Indeed, the STA spokeswoman is further reported as observing with complete truth that “Government subsidies would still be required to support the majority of solar projects in future.” (“Solar power breakthrough as subsidy-free farm opens”).

If these contradictions were not bad enough for departmental credibility, there is behind it all a still deeper irony: the Capacity Mechanism and its market for expensive grid balancing options such as batteries only exists to address the undesirable consequences of the government’s cack-handed market distortions in favour of uncontrollable renewables such as solar and wind. 

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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