GWPF Newsletter: Paris Climate Agreement In Disarray

Developing Countries Demand Long-Promised $100 Billion P.A. From Richer Nations

In this newsletter:

1) Paris Climate Agreement In Disarray As Developing Countries Demand Long-Promised $100 Billion P.A. From Richer Nations
National Post, 11 May 2018 
 
2) China, India Outsource CO2 Emissions, Risking Paris Agreement – Study
Reuters, 14 May 2018 

 
3) Wind Farm Lifetime Extensions And Repowering: Managing The Death Spiral
GWPF Energy, 13 May 2018 
 
4) Garth Paltridge: Four Questions On Climate Change
Global Warming Policy Foundation, May 2018 
 
5) New Coal Boom In The Middle East
U.S. Energy Information Administration, 11 May 2018

Full details:

1) Paris Climate Agreement In Disarray As Developing Countries Demand Long-Promised $100 Billion P.A. From Richer Nations
National Post, 11 May 2018
Matthew Carr, Bloomberg

Two weeks of climate talks organized by the United Nations finished with developing countries demanding more clarity from their richer counterparts on when a promised package of $100 billion in aid will materialize.

Envoys from almost 200 nations are leaving Bonn, Germany, on Thursday without producing a draft negotiating text for ministers to discuss at the end of the year. Instead, they planned another round of negotiations in Bangkok before their annual conference in Poland in December.

The holdup threatens to unravel three years of work to complete the Paris Agreement, a landmark deal reached in 2015 that set out an ambition to limit fossil-fuel pollution in all nations for the first time. Negotiators are working toward writing a rule book that will help bring the pact into force even as U.S. President Donald Trump vowed to withdraw from the Paris framework.

“Sharp political differences remain on a handful of issues, especially on climate finance and the amount of differentiation in the Paris Agreement rules for countries at varying stages of development,” said Alden Meyer, who has been following the talks for more than two decades for the Union of Concerned Scientists. “These issues are above the pay grade of negotiators in Bonn and will require engaging ministers and national leaders.”

Tensions have been building for years on the matter of financing that industrial nations promised developing ones to pay for transforming their economies to run on clean energy — and to cope with the more violent storms and rising sea levels associated with higher global temperatures.

Rich countries led by the U.S. and European Union pledged in 2009 to ramp up climate-related aid to $100 billion a year by 2020. While they have made progress on that commitment, reaching $62 billion in 2014 according to one official study, developing nations want more detail on what money is coming before signing up to the Paris rules.

Developing nations are being asked for more transparency on the emissions they produce — and to open up to some sort of process for verifying that information. Many of them are concerned that will add expensive and cumbersome bureaucracy — or that richer nations will use those tools to limit trade. Richer countries see the rules as essential to making credible the pollution cuts that the Paris deal promises.

“If you don’t have policies that underpin the number that’s been put in Paris, you’ve got nothing to drive progress,” said Elina Bardram, a European Commission official who’s head of the EU delegation at the talks in Bonn.

Developing nations say that a rebound in the cost of carbon emissions in Europe is creating pools of new cash that might come their way. As industrial countries take on tighter emission targets, they may buy traded carbon credits from poorer nations, said Wael Aboulmagd, an Egyptian ambassador who was speaking for the group of developing nations called G77 & China.

“People are anticipating that down the road this is going to be a significant contributor to the balancing of emissions with trade issues and enticement for countries to show more ambition,” Aboulmagd said.

Patricia Espinosa, who leads the UN body organizing the talks, said at a press conference in Bonn that the past two weeks were a “productive session,” although “there continues to be more progress on some issues than others.”

The work of creating a text was supposed to be completed in Bonn and now will shift to another meeting to be convened in Bangkok later this year. The extra time would be used to produce clear options for the end-of-year session in Katowice, Poland, which will be attended by ministers and world leaders.

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2) China, India Outsource CO2 Emissions, Risking Paris Agreement – Study
Reuters, 14 May 2018

A shift to manufacturing in cheaper Asian nations could thwart attempts to curb carbon emissions in line with the Paris Agreement

By Michael Taylor

KUALA LUMPUR, May 14 (Thomson Reuters Foundation) - A rising tide of industries moving operations from China and India to less-developed Asian countries undermines global targets to reduce climate-changing emissions, researchers said.

Many energy-intensive industries, including manufacturing and raw materials processing, are relocating to cheaper countries like Indonesia, Vietnam and Thailand, a study by Britain's University of East Anglia (UEA) showed on Monday.

"The Chinese production system is starting to transform to be more higher value-added," said Dabo Guan, professor of climate change economics at UEA and a co-author of the report.

"The price of labour in China has increased quite a lot," he told the Thomson Reuters Foundation.

The shifts in production and trade will make it harder to meet the Paris Agreement goal of cutting emissions enough to keep the rise in global average temperatures to "well below" 2 degrees Celsius (3.6F) above pre-industrial times, Guan said.

Efforts by smaller developing nations have a growing role to play in staying below that limit - but it could be jeopardised by the new pattern of manufacturing, the report added.

It found that trade among developing nations - known as "South-South" trade - more than doubled between 2004 and 2011.

Energy-intensive industries, such as electronics and steel production, have come under pressure to clean up in recent years as Beijing looks to cut emissions, improve working conditions and reduce air pollution in its towns and cities.

Meanwhile, the growth of carbon emissions generated in the manufacture of Chinese exports has slowed or reversed, while emissions embedded in exports from less-developed countries like Vietnam and Bangladesh have surged, the report said.

International trade increased by more than 50 percent from 2005 to 2015, with about 60 percent of that rise tied to growing exports from developing nations, it added.
In the same period, South-South trade more than tripled to 57 percent of all developing-country exports in 2014, said the study published in the journal Nature Communications.

Full story
 
3) Wind Farm Lifetime Extensions And Repowering: Managing The Death Spiral
GWPF Energy, 13 May 2018
Dr John Constable: GWPF Energy Editor

In the absence of new subsidies, we could be looking at the beginning of the end for the wind industry in Europe.

New academic research on whether to repower or extend the lifetime of an obsolescent wind farm in Europe reveals that without new subsidies for repowered sites, low cost lifetime extensions focused on maximising return before decommissioning are more probable, with a potential to affect about half the wind turbine fleet in Germany, Spain and Denmark. In the absence of new subsidies, we could be looking at the beginning of the end for the wind industry in Europe.

In March this year the renewables policy cheerleaders, the Energy and Climate Intelligence Unit (ECIU), which is predominantly funded by the European Climate Foundation and the Grantham Foundation, published a study, Repower to the People, claiming that the UK could and should repower some sixty onshore wind farms over the next five years and so gain a net increase in capacity of more than 1.3 GW. The paper did not examine the underlying economics and policy context of decisions to repower, and relied simply on the reader’s naïve enthusiasm for technological progress when confronted with the fact that, for example, contemporary turbines are two to three times the capacity (2–3 MW) of the previous generation (< 1 MW), with the latest models approaching 4 MW. Bigger must  surely be better, especially given the obvious economies:

As well as offering simplicities and potentially lower costs compared with developing a new site, repowering is also logical given that many of the earliest wind farms are in locations that have the best wind resource. (Repower to the People, p. 4.)

Sympathetic MPs were produced to provide quotations in the press suggesting that it was simply a question of government removing the obstacles to this commonsense development, with Mr Simon Clarke, the Conservative Party’s MP for Middlesborough South and East Cleveland, being reported as observing that:

For those worried about the 1 per cent of UK gas imports that come from Mr Putin, these upgrades would also reduce our reliance on imported fuel by the equivalent of two gas-fired power stations; and if we don’t allow developers to repower them, we may lose them for good. (Utility Week, 27.03.18)

There is of course nothing to stop developers repowering such sites, except that: 1 there are no subsidies available, and without such subsidies the low market prices probable over the next decade are insufficient to motivate re-investment.

Furthermore, the owners seeking to repower would have to apply for a new planning consent, which would be problematic now that the unneighbourliness of large wind turbines is notorious. Indeed, as the authors of a new and important academic survey of repowering and lifetime extension, report, the state of Bavaria has even “introduced in 2014 a regulation that sets a new minimum distance of ten times the tip-height between a wind turbine and the closest residential areas” (L. Ziegler et al. “Lifetime extension of onshore wind turbines: a review covering Germany Spain, Denmark, and the UK, Renewable and Sustainable Energy Reviews 82 (2018), 1261–1271).

A modern machine can be upwards of 120 metres (nearly 400 feet) to tip, so this implies a separation of over three quarters of a mile, and would rule out many existing onshore wind farms in the UK, particularly in England, where at present there is no formally required separation distance.

Indeed, contrary to the “simplicities” urged on us by the ECIU, the work published by Ziegler and her colleagues, who write from a position of fundamental sympathy for the wind industry, makes it clear that the decision facing owners of ageing wind farms is extremely difficult, except to decommission. Repowering is by no means a simple matter:

Sites with existing wind farms are often impossible to repower due to lack of availability of the site, legal consent, changes in subsidies, environmental protection, public acceptance, or insufficient wind conditions. (p. 1265)

The landowner may no longer want a wind farm; and even if they are willing, new legal permission may not be easy to obtain; subsidies are insufficient or non-existent; the larger wind turbines may breach environmental regulations; the neighbours may not welcome bigger or any wind turbines; and, interestingly, the wind conditions may now be known to be unsuitable or have become so due to the adjacent location of other wind farms (see Ziegler et al. Table 4, p. 1269).

In fact, these authors report that the principal “favourable legal and economic conditions for repowering” are “profitable subsidy schemes” and a “scarcity of sites”. In the UK there are no subsidies available, and so long as the Scottish government is prepared to continue granting planning consents against vigorous protests, there will be no shortage of alternative sites in the United Kingdom. The ECIU’s proposed major repowering over the UK as a whole is a complete non-starter. Moreover, this is no parochial matter. As Ziegler et al. show, repowering is an unattractive option throughout Europe, since “no political repowering subsidies exist in Germany, Spain, Denmark, and the UK”.

Instead, wind farm owners will be looking at the possibility of extending the lifetimes of their existing wind farms. But this is itself by no means an easy option, and requires careful assessment of the condition and performance of the existing asset to determine the Remaining Useful Lifetime (RUL) of the major components, and, crucially, “whether operational costs are balanced by revenues for the produced energy”. Most of that latter anxiety is focused on the future market price for the electricity produced, and not on the operational costs, since as the authors report on the basis of a number of industry interviews:

Uncertainty about future failure rates was not a major consideration of operators. Since lifetime extension requires only low investments, a common approach is terminate turbine operation if costly repairs become necessary. (p. 1268.)

None of this sounds like the behaviour of a vigorous and expanding industry. Indeed, it seems more likely to be the skilful management of the death spiral, ensuring that owners extract as much as possible from investments made under the existing policy instruments before they exit to enjoy their winnings.

This is a situation that could develop very rapidly. Ziegler et al. report that in 2016 some 12% of the installed wind turbine capacity was older than 15 years, a share that will increase to 28% by 2020 (p. 1261). The UK, as a relative latecomer to this enthusiasm, will be below the average, with only 10% of its current capacity older than 15 years in that year, but in other countries, as the authors themselves admit, the “future age distribution of installed wind capacity almost looks dramatic”:

By 2020, 41% of the currently installed capacity in Germany will be over 15 years old, 44% in Spain, and 57% in Denmark.

If this is not repowered, and the evidence presented in this paper suggests strongly that without new subsidies owners will prefer to focus their attention on short-run lifetime extensions, we will be looking at the beginning of the end of the wind industry in Europe.
 
4) Garth Paltridge: Four Questions On Climate Change
Global Warming Policy Foundation, May 2018



A statement to the effect that there is a ‘consensus among scientists’ on AGW is more or less equivalent to saying that ‘the science is settled’. While there is certainly a consensus among scientists that increasing carbon dioxide in the atmosphere will increase the average surface temperature of the world above what it would have been otherwise, there is far from a consensus that the rise in temperature will be large enough to be significant. Bear in mind also that ‘what the temperature would have been otherwise’ is also subject to natural variability and is therefore very uncertain. There is even less of a consensus among scientists, environmentalists and economists that any rise of temperature would necessarily be detrimental.

Full essay
 
5) New Coal Boom In The Middle East
U.S. Energy Information Administration, 11 May 2018

Countries in and around the Middle East will add 41 gigawatts (GW) of new coal-fired power plants over the next decade.



Planned coal-fired capacity additions from a number of countries in and around the Middle East will add 41 gigawatts (GW) of new electric generating capacity over the next decade, based on announced projects and projects currently in the permitting process. Another 3 GW of coal-fired capacity is currently under construction in these countries. About 12 GW of coal-fired generating capacity—or about half of the region’s coal-fired generating fleet—has come online since 2006.

Coal capacity in the region is typically less than that of other fuels, particularly compared with liquefied natural gas or petroleum-based fuels, because coal accounts for less than 1% of primary energy production in the region. Turkey is the heaviest user of coal-fired power among these countries with a capacity of approximately 18.5 GW, followed by Israel (4.9 GW) and Pakistan (2.5 GW). Turkey and Pakistan both plan to add more coal capacity over the next decade.

Egypt, Oman, Iran, Jordan, and the United Arab Emirates (UAE) have no current coal-fired electricity generation, but they each plan to build coal capacity in the near future. New coal capacity is currently under construction in the UAE, Iran, and Jordan. In addition, Egypt and Oman have announced plans for new coal-fired generators.
In the UAE, new coal-fired capacity will come from Dubai’s Hassyan Project. The project consists of 3.6 GW of ultra-supercritical generating capacity, 2.4 GW of which is currently under construction and expected to become operational between 2020 and 2022. Another 1.2 GW was announced for a total of 6 units (with an average size of 600 megawatts (MW) expected to come online in 2023.

The $3.4 billion project is sponsored by several investors, including Chinese and domestic banks.

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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 www.thegwpf.com.