Tuesday, June 5, 2018

GWPF Newsletter: Germany’s Planned Coal Exit Hits A Wall

'Trump Has Broken The Spell Of Climate Change Mania'

In this newsletter:

1) Germany’s Planned Coal Exit Hits A Wall
Dave Keating, Forbes, 1 June 2018
2) Charles Moore: Trump Has Broken The Spell Of Climate Change Mania
The Daily Telegraph, 1 June 2018

3) Looking Back on Trump’s Paris Decision: Why It Protected the Constitution and Rule of Law
Competitive Enterprise Institute, 31 May 2018
4) Offshore Windfarm Will Cost £2.5 Billion In Subsidies
Guido Fawkes, 31 May 2018
5) Rampion Offshore Wind Farm Lifetime Subsidies Will Total £2.5 Billion
GWPF Energy, 30 May 2018

Full details:

1) Germany’s Planned Coal Exit Hits A Wall
Dave Keating, Forbes, 1 June 2018

Germany’s task force for phasing out coal was meant to launch this week, but yesterday the government quietly announced it is delaying the kick-off. It is the third time the coal exit commission’s launch has been delayed.

German coal power plants, source: Stepmap

The task force has become so controversial – even before it comes into existence – that the government can’t get it started. Since the idea was proposed by German Chancellor Angela Merkel last year, it has been plagued by fighting over who will lead it, what it will do, and how much power it will have.

There have been arguments about the most minute aspects of the committee, such as what it should be called, who should be in it, and what it should list as its deliverables.

Despite the delays, Berlin is insisting that it will stick to its time line of setting an end date for the use of coal in Germany by the end of the year. This was a central part of the coalition agreement between Merkel’s center-right Christian Democrats and the center-left Social Democrats agreed in January, setting the stage for the Merkel’s third government which star in March.

A previous attempt to form a coalition government between the Christian Democrats, Liberals and Greens collapsed under the weight of intense disagreements between the free-market Liberals and environmentalist Greens over the coal phase out. The latter said it was essential to any coalition agreement, but the former said it was unacceptable. […]

Coal is Germany’s single-largest source of carbon emissions, and analysts have said there is no way the country can meet its long-term climate goals without quitting coal. Germany wants to be carbon-neutral by 2050. The country currently gets 40 percent of its energy from coal, a number that has risen since Merkel’s decision to phase out nuclear power in 2011, after the Fukushima nuclear incident in Japan.

The task force is a mammoth project, involving eight German federal ministries, six German states, and perhaps up to 20 utilities and companies. The German website ZfK has published a leaked provisional list of the participants.

Full story

2) Charles Moore: Trump Has Broken The Spell Of Climate Change Mania
The Daily Telegraph, 1 June 2018

Since Mr Trump walked out of the Paris agreement one year ago, it has been fascinating to watch the decline of media interest in “saving the planet”.

Donald Trump imposed punitive tariffs on steel imports exactly a year after he announced that the US would withdraw from the Paris climate change agreement. The two decisions are unrelated, except that both reflect the character of his presidency.

President Trump looks at any international arrangement on any subject – Iran, North Korea, trade, climate – and asks himself whether it is a good deal for America. If he thinks it is not, he starts making trouble. He loves a deal but, unlike some politicians on this side of the water, he sees no point in a bad deal.

When President Trump starts the trouble, he does not necessarily know where it will end. He is, if you like, open-minded; or, if you don’t like, irresponsible. He just wants a result, and will pull back if he thinks he won’t get the right one. In the case of his trade war, he will succeed if his action exposes unfair practices by trade rivals and forces them to change. He will fail if all he does is put up everyone’s prices, including, of course, America’s.

In the case of the Paris process, he has succeeded almost without trying. The answer to the question, “Which major country in the world has most successfully reduced its CO2 emissions?” is, “The United States of America”. US emissions hit a 25-year low last year. This success has nothing to do with the UN caravan, which has rolled on for 30 years, or, indeed, with Mr Trump. It has everything to do with the shale revolution – the triumph of much cleaner fossil fuels. Energy prices are falling.

By contrast, the greenest of the great economic powers, Germany and Japan, have poured money into renewables. They are consuming more coal than before, however, with Japan planning 36 new coal-fired power stations over the next 10 years. Since renewables are not reliable (because of intermittency), Germany must have more coal or lie prostrate before Mr Putin and his gas. Both Germany and Japan are increasing their carbon footprint because they have run away from nuclear. Energy prices are rising. China, after a slowdown, is increasing its CO2 emissions fast once again.

As for “Paris”, this is failing, chiefly for the reason that poorer countries won’t decarbonise unless richer ones pay them stupendous sums. The amount supposedly required to do this, agreed at the Copenhagen conference in 2009, was $100 billion a year, every year, from 2020; but no mechanism could be devised to compel the poor countries to restrict their emissions. At yet another conference in the process, in Bonn last month, the parties broke up without agreement on handing the money across. It is almost impossible to imagine real agreement, because it would be unenforceable.

If you look back, you can see that Copenhagen was the first ebbing of climate panic. Gordon Brown, then prime minister, told us that we had “50 days” to avoid catastrophe. Prince Charles warned delegates that “our planet has reached a point of crisis and we have only seven years before we lose the levers of control”. President Barack Obama, burnished by his freshly awarded Nobel Peace Prize, flew in. Yet all these great men failed to persuade the wretched of the earth to abandon their right to economic growth. “With your pens, you can write our future,” said HRH. The developing countries had the wit not to sign all the same.

Perhaps if Copenhagen had taken place before the global credit crunch of 2008, the world would have swallowed anything. The great paradox of greenery is that it is a boom phenomenon: only when a society is awash with dosh does it start believing it wouldn’t mind getting poorer. By December 2009, however, the dosh had evaporated.

The Paris conference of 2015 put a brave face on the failure of Copenhagen, by parading an agreement. But as the agreement was non-binding, and permitted countries to determine their progress on CO2 reductions unilaterally, it did not alter the reality. The whole UN process originated in the belief that global warming could be prevented only by a global solution. It never found that solution, and so, at Paris, was hoist with its own petard.

The Prince of Wales was proved wrong in 2016, when the “irretrievable climate and ecosystem collapse” that he had predicted did not show up. Yet he spoke truer than he knew when he made that warning about losing the levers of control. The global warmists lost those levers – if they ever had them – after Paris.

Mr Trump noticed this and felt free to walk away. US participation in the Paris arrangements formally ends the day after the next US presidential election. It will be a brave Democrat who campaigns for the White House on a “Let’s stay in” ticket. What’s in it, after all, for America?

Since Mr Trump walked out, it has been fascinating to watch the decline of media interest in “saving the planet”. There was the most tremendous rumpus when he made his announcement, but the End-Of-The-World-Is-Nigh-Unless feeling that made headlines before Rio, Kyoto, Copenhagen, Paris, and numerous other gatherings, has gone. This feeling was essential to achieve the “Everybody’s doing it, so we must do it” effect the organisers sought.

The media barely noticed the recent Bonn meeting. I doubt if they will get apocalyptic about the next big show, “COP24” in Katowice, Poland, this December. The Poles are among the nations emerging as “climate realists” – people with their own coal and a very strong wish not to depend on the Russians. Climate-change zealotry is looking like CND after the installation of cruise and Pershing missiles in the 1980s – a bit beside the point.

None of this means that activism will disappear. There will be strong anti-American campaigns and moves to impose ESG (environmental, social and governance) investment principles to make the lives of fossil-fuel companies a misery. In Britain, energy bill levies to subsidise renewables will probably continue to ensure that Theresa May’s famous “just about managing” people are just about screwed simply because they want light and heat in their home.

There will also be plenty more pieces of green showmanship. Here we have Claire Perry, our Minister for Energy and Clean Growth, who wants us “Powering Past Coal” just when we shall probably have to run after the stuff to keep the lights on. In France, Nicolas Hulot, the funky and untranslatable “Ministre de la Transition écologique et solidaire”, has ordered an end to the internal combustion engine by 2040, despite possessing six cars, a motorboat and a BMW motorbike. But M Hulot’s holiday from reality will not much affect the course of events, and Ms Perry has a lot less power than Rick Perry, Mr Trump’s Energy Secretary.

The great guardians of this attempt at government by global conferencing will continue to make their speeches and write their reports, usually paid for out of public funds. The frameworks and panels, the COPs and ARs, the climate-change organisations that fill 168 pages of Wikipedia, all these will continue, though with diminished status. Priesthoods usually find ways to survive longer than the belief systems they represent. But the recognition is now dawning that, if the planet needs saving, it will not be achieved by these means.

3) Looking Back on Trump’s Paris Decision: Why It Protected the Constitution and Rule of Law
Competitive Enterprise Institute, 31 May 2018
Chris Horner

This week marks the one-year anniversary of President Trump’s decision to withdraw the United States from the all-pain-no-gain Paris climate treaty. In response to a Freedom of Information Act (FOIA) request, the U.S. State Department recently produced nearly 450 pages of emails and memos—almost every single word of which was redacted. What the department blacked out would have shed light on how the Obama White House got us involved in the Paris treaty by embarking on an unprecedented end-run around the Constitution.

These painted-over documents respond to a Competitive Enterprise Institute FOIA lawsuit that follows up on previously obtained documents in which members of the Obama administration schemed to cut the Senate out of its constitutional role regarding the Paris “commitment.” This document production theoretically addressed the Obama administration’s deliberations, as it was being negotiated, on whether to properly treat the Paris agreement as a treaty given, among other considerations, the seriousness and extent of the U.S. promises.

If so treated, the administration would need Senate ratification as expressly laid out in the Constitution. There, its chances for approval by the required two-thirds majority were slim to none. The unprecedented gambit was for the State Department’s lawyers to declare something that was by its terms, custom and practice, and even its own lineage and Senate history a treaty to simply be not a treaty—merely an “executive agreement.” The administration then proceeded to claim that the president’s signature alone was enough to bring it into force, “ratifying” the agreement by its famous pen-and-a-phone approach.

Because of this dynamic, pulling off the claim that Paris was “not a treaty” was almost as important to Team Obama as the substance of the agreement itself. The problem was that the State Department’s traditional criteria for determining what qualifies as a treaty, laid out in a department document known as “Circular 175,” makes inescapable that the Paris agreement is of course a treaty. The disingenuous, behind-the-scenes scramble to claim a legal conclusion to the contrary—which itself remains unpublished—is what CEI seeks to shed light on. The Obama team’s revolutionary position, never stated for the sheer outrageousness on its face, was that a pact simply isn't a treaty if a president says it isn’t—more precisely, that the Senate’s express role in the process only exists at the executive's pleasure—say, when he can rely on the institution agreeing with his agenda.

Full post

4) Offshore Windfarm Will Cost £2.5 Billion In Subsidies
Guido Fawkes, 31 May 2018

A single offshore wind farm is set to cost £2.5 billion in subsidies over its 20 year life-span, shocking figures reveal.

Newly constructed Rampion wind farm, off the Sussex coast, consists of 116 turbines. The project’s HQ was opened this week by hard-hat-toting Maria Caulfield MP. Guido wonders whether she is aware the project is a black hole for bill payer’s money…

According to analysis by the Global Warming Policy Forum, the project will qualify for about £126 million a year in public subsidies over two decades (under legacy arrangements made before the cancellation of the Renewables Obligation). Furthermore:

“The wholesale price of the electricity will only add about another £60 million a year, so roughly two thirds of the annual income of the project will be non-market public support.”

The return on the huge investments involved will mostly come from the public purse, not from selling electricity…

Moreover, an equivalent investment in gas-fired power plants could generate three times as much energy, subsidy-free. And they work all the time, on demand…

5) Rampion Offshore Wind Farm Lifetime Subsidies Will Total £2.5 Billion
GWPF Energy, 30 May 2018
Dr John Constable: GWPF Energy Editor

The 400 MW Rampion Offshore Wind Farm is nearly complete, and has now formally opened its Operations and Maintenance headquarters in Newhaven. This wind farm alone will add £2.5 billion in total to the cost of UK electricity over its approximately 20 year lifetime, that being the total subsidy to be paid at a rate of about £126 million a year over the two decades.

Parliamentarians and other decision makers have have a fatal weakness for policy outcomes forming a suitable background for a photograph, and Maria Caulfield, MP, who represents Lewes in Sussex, duly turned up  to wear the hard-hat-and-hi-viz-jacket and give an upbeat speech at the opening of the Newhaven headquarters of the Rampion Offshore Wind Farm, which is currently approaching completion. No politician hoping for re-election can be expected to be on oath in such situations, and the phoney absurdity of  these ceremonies is perhaps the defining and soul-destroying occupational hazard of modern constituency life. Who knows what MPs really think when they open a wind farm. Perhaps they are not altogether sure themselves. If so, their uncertainty would be intelligible if not forgivable, for good information is hard to come by, and in spite of increasing awareness in some circles of the underlying economic realities of the UK’s renewables programme, the industry has wisely relied on public misconceptions and patiently stood its ground while refusing to talk about the subsidies unless absolutely forced to do so.

Stations currently commissioning, like Rampion, even benefit from the fact that even those members of the public who are interested in such matters are under the impression that the whole orgy of subsidies is over. Hasn’t the Renewables Obligation closed? Hasn’t the Treasury put a freeze on new renewables subsidies until the mid 2020s at the earliest? Yes, yes. The RO closed to new entrants in 2017, and the moratorium imposed by the Treasury in last year’s Autumn Budget is perhaps the most significant and under-publicised climate policy decision of the last five years or so. – The game is clearly up. But if so, what is Rampion playing at? If you turn for such economic information to the wind farm’s otherwise very informative website you will be disappointed.  The developers are only too happy to tell you that the project has created a number of jobs locally, that it is making a substantial sum available for a local community fund, that it will generate enough electricity for 350,000 homes, that it will prevent the emission of a certain quantity of carbon dioxide, and that they are investing £1.2 billion in the project. Of their likely income you will find nothing.

But £1.2 billion is a great deal of money, and represents the disposition of a vast bulk of real world resources, about £3m/MW in fact, perhaps four or five times as much as the capital cost of a Combined Cycle Gas Turbine (CCGT). Sensible companies don’t spend on that scale without a very clear idea of how they will make a return. What could possibly motivate the site’s owners? (Those owners, by the way, are E.ON (50.1%) the Green Investment Bank (25%), now owned by Macquarie Group Limited, and, curiously, the North American energy company, Enbridge (24.9%), whose pipelines move about one fifth of all the natural gas consumed in the United States.)

The answer is subsidies, of course, for the Rampion Offshore Wind Farm has a legacy entitlement under the so-called “grace period” of the Renewables Obligation. Ofgem’s public register tells us that this station (R00034RPEN) was accredited on the 26 November 2017. It will therefore receive 1.8 Renewable Obligation Certificates (ROCs) for every one of the approximately 1,400,000 megawatt hours that its owners believe it will generate.

At current ROC prices that will amount to about £126 million pounds a year in subsidy. The wholesale price of the electricity will only add about another £60 million a year, so roughly two thirds of the annual income of the project will be non-market public support. Put another way, using CCGTs instead of Rampion, the UK would have almost three times as much electricity for the same cost, and have it when that energy is on demand rather than at the mercy of the weather.

Furthermore, these subsidy entitlements are for the long term, and over the twenty year lifetime the total subsidy to Rampion will come to about £2.5 billion. This is the hangover from the renewables party, and why the official projections for renewables subsidies, such as those presented by the Office for Budget Responsibility (OBR) continue to increase from the current level of £8.8 billion per year to £11.5 billion per year in the period 2022 to 2023 (see tab 2.7 in the OBR’s “March 2018 Economic and fiscal outlook – supplementary fiscal tables: receipts and other”), in spite of the closure of the schemes and the refusal of the Treasury to introduce replacements.

The UK government is very prone to bragging about the falling cost of offshore wind, which it demonstrates by pointing to the £57.50/MWh bids made in the last round of Contracts for Difference (CfD) auctions and applying to projects due to start generating in the early 2020s. Some of us don’t believe that those bids are actually economic, but government appears to take them at face value. In which case, why is another offshore wind farm, Rampion, commissioning only a few years before, set to receive more than double that CfD bid at roughly £140/MWh? One of these two figures must, surely, be a long way from the truth. Which is it?

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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