Thursday, February 25, 2021

GWPF Newsletter: High electricity cost drives German high-tech industry to Asia


Chipmakers lament high taxes and green levies on electricity in Germany

In this newsletter:

1) High electricity cost drives German high-tech industry to Asia
Global Warming Policy Forum & Handelblatt, 23 February 2021
2) Chipmakers lament high taxes and green levies on electricity in Germany
Clean Energy Wire, 23 February 2021

3) 'China is going to play them': Trump energy secretary says Biden plan won't work
Washington Examiner, 21 February 2021
4) Ralph Alexander: Latest computer climate models run almost as hot as before  
Ralph Alexander, Science Under Attack, 22 February 2021

5) Terence Corcoran: When the ice storm cometh
Financial Post, 19 February 2021
6) Duggan Flanakin: The Myth (And Phony Math) Of ‘Green’ Jobs 
Eurasia Review, 22 February 2021
7) Walter Russell Mead: The Polar Bear Paradox
The Wall Street Journal, 23 February 2021

Full details:

1) High electricity cost drives German high-tech industry to Asia
Global Warming Policy Forum, 23 February 2021
Siltronic, one of the world’s leading chip makers, is moving Germany’s top high-tech company to Asia.

Siltronic boss Christoph von Plotho blames Germany’s high energy costs for the decision to move the IT company to Asia: “The high electricity price makes the location unattractive,” he said in an interview with the Handelsblatt. His company pays “less than half the electricity price” in Singapore.
The main cost driver in Germany is the green energy levy under the Renewable Energy Sources Act (EEG) which has cost energy consumers more than 30 billion euros last year.
Germany’s largest semiconductor producer Infineon told Handelsblatt that the growing risk of an insecure power supply was also a major factor in reconsidering industrial production in Germany and Europe.
see also: Fritz Vahrenholt: Germany's Energiewende - A disaster in the making



2) Chipmakers lament high taxes and green levies on electricity in Germany
Clean Energy Wire, 23 February 2021
Several chip and semiconductor manufacturers have criticised high taxes and levies on electricity as a disadvantage for Germany as an industry location in global competition, reports business daily Handelsblatt

“The high electricity price makes the location unattractive,” Christoph von Plotho, head of chip supplier Siltronic, told Handelsblatt. Another main reason were high personnel costs in Germany.

At the same time, a spokesperson of Germany’s largest semiconductor producer Infineon told Handelsblatt that a secure power supply without fluctuations was also a major factor in keeping production in Germany and Europe.
The comments showed that the issue of high power costs extended beyond the traditional industry companies like chemical factories, to high tech sectors, writes Handelsblatt.

The reason for high power prices are taxes and levies on electricity, such as the renewables levy to finance the expansion of wind and solar energy. Many companies are partly or fully exempt from certain levies. In addition, the government has started to use state budget funds, such as revenues from the new CO2 price for transport and heating fuels, to help cap the levy and it plans to further decrease it over coming years.

Full story
3) 'China is going to play them': Trump energy secretary says Biden plan won't work
Washington Examiner, 21 February 2021

Dan Brouillette, the Energy secretary in the Trump administration, says President Biden’s climate envoy John Kerry is “misguided” to think he can set aside the biggest confrontations with China to cooperate on combating climate change.

“China is going to play them,” Brouillette told the Washington Examiner in a wide-ranging interview.
Brouillette, in office from 2019 until January, has spent the weeks since he left vacationing with his family in Tennessee as he decides his next plans.
But that hasn’t stopped him from watching Biden’s first weeks in office.

The Biden administration has signaled it wants to continue former President Donald Trump's tough line on China over issues such as trade, intellectual property theft, and market access. But Kerry, who celebrated the U.S. return to the Paris Agreement on Friday, is banking on treating climate as a “standalone issue,” given China’s importance in enabling the world to meet emissions reduction goals.

Kerry has compared the scenario to President Ronald Reagan and Mikhail Gorbachev negotiating over nuclear arms in 1986. China and the United States, the world’s top emitters and largest economies, represent as much as 45% of global emissions.
However, Brouillette doesn’t trust China’s pledge to reach carbon neutrality by 2060. To get on that path, critics say, China should be aiming to reduce emissions this decade, not just stop growing them, by reducing its consumption of coal.
“They will agree to some 2060 target and have no intention of meeting any of it,” Brouillette said. “If they can get relief on the trade side and make some cockamamie commitment for 2060, they will do it. The Chinese are pretty sophisticated players and see through these comments [from Kerry]."
Brouillette also criticized Biden’s executive action to pause oil and gas leasing on public lands and waters. Lost production, he said, would be replaced elsewhere, meaning emissions won’t fall much globally.
“If we end production in the U.S., you will slow the transition of places like China and India [from coal] to natural gas,” Brouillette said. “As a result, we won’t have anywhere near the carbon reductions we think we’ll have."
Full story
4) Latest computer climate models run almost as hot as before  
Ralph Alexander, Science Under Attack, 22 February 2021

The narrative that global warming is largely human-caused and that we need to take drastic action to control it hinges entirely on computer climate models. It’s the models that forecast an unbearably hot future unless we rein in our emissions of CO2.

But the models have a dismal track record. Apart from failing to predict a recent slowdown in global warming in the early 2000s, climate models are known even by modelers to consistently run hot. The previous generation of models, known in the jargon as CMIP5 (Coupled Model Intercomparison Project Phase 5), overestimated short-term warming by more than 0.5 degrees Celsius (0.9 degrees Fahrenheit) above observed temperatures. That’s 50% of all the global warming since preindustrial times.
The new CMIP6 models aren’t much better. The following two figures reveal just how much both CMIP5 and CMIP6 models exaggerate predicted temperatures, and how little the model upgrade has done to shrink the difference between theory and observation. The figures were compiled by climate scientist John Christy, who is Director of the Earth System Science Center at the University of Alabama in Huntsville and an expert reviewer of the upcoming sixth IPCC (Intergovernmental Panel on Climate Change) report.

Both figures plot the warming relative to 1979 in degrees Celsius, measured in a band in the tropical upper atmosphere between altitudes of approximately 9 km (30,000 feet) and 12 km (40,000 feet). That’s a convenient band for comparison of model predictions with measurements made by weather balloons and satellites.

The thin colored lines indicate the predicted variation of temperature with time for the different models, while the thick red and green lines show the mean trend in degrees Celsius of warming per decade for models and observations, respectively.

The trend for CMIP6 models is depicted more clearly in Christy’s next figure, which compares the warming rates for 39 of the models. The average CMIP6 trend in warming rate is 0.40 degrees Celsius (0.72 degrees Fahrenheit) per decade, compared with the actual observed rate of 0.17 degrees Celsius (0.31 degrees Fahrenheit) per decade – meaning that the predicted warming rate is 2.35 times too high.

These CMIP6 numbers are only a marginal improvement over those predicted by the older CMIP5 models, for which the warming trend was 0.44 degrees Celsius (0.72 degrees Fahrenheit) per decade, or 2.75 times higher than the observed rate of 0.16 degrees Celsius (0.29 degrees Fahrenheit) per decade (for a slightly different set of measurements).

It’s seen that the warming rates for any particular model fluctuate wildly in both cases, much more so than the observations themselves. Christy says the large variability is a sign that the models underestimate negative feedbacks in the climate system, especially from clouds that I’ve discussed in another post. Negative feedback is stabilizing and acts to damp down processes that cause fluctuations. There is evidence, albeit controversial, that feedback from high clouds such as cirrus clouds – which normally warm the planet – may not be as strongly positive as the new models predict, and could even be negative overall.
Full post

5) Terence Corcoran: When the ice storm cometh
Financial Post, 19 February 2021

Texas crisis will reshape energy policy-making everywhere as wind-power collapse puts renewables under scrutiny

The North American energy policy community, a space already filled with plenty of hot air streaming in from the global warming conflict, now faces a new jet stream of cold winds blowing down via the polar vortex. There’s no point getting bogged down in the climatic origins of the polar vortex; suffice to say that its recent acceleration has had a devastating impact on North American weather patterns.
What’s most interesting and important is the energy politics triggered by the polar vortex and its impact on the Texas power grid. Indeed, the Texas power wipeout instantly generated an explosion of hype, conflict and debate that will shape energy policy-making for some time. The key question: What are the risks in renewable power, especially wind?

Over the past week, shares of key renewable corporations have dropped, presumably brought on by reports that a collapse in the Texas wind-power sector was one of the main factors behind the failure of the Texas electricity grid. Among the until-now high-flying wind power firms to take a hit are NextEra Energy Partners, down 10 per cent over the past week. Other renewables in different sectors (Brookfield Renewable Partners down six per cent, Renewable Energy Group down 20 per cent) seemed to be part of a sudden ice storm downdraft that struck just as the sector was hitting a likely over-bought peak.

Another indicator of a potential energy policy-making turnaround was the renewable clash generated by Texas Gov. Greg Abbott. On Feb. 9, before the polar vortex descended on his state, Abbott received an award recognizing his commitment to wind development. “Clean and renewable energy are a valuable part of America’s future and are closely tied with Texas’ prosperity and success,” said Abbot. “While Texas continues its leadership in production in our oil and gas sector, the Lone Star State also is a national and international leader in wind energy.”
A few days later after the blackouts spread across Texas, Abbott blamed the grid meltdown and blackouts on the failure of the state’s renewable wind power to operate through the storm. Fierce attacks followed. That brought on a round of counter attacks from the media and green activists who, with some accuracy, noted that the Texas power failure was not solely a product of the collapse of wind power.

In reality, the fierce storms and cold locked down other power sources, although it is clear that wind-generated power all but collapsed, with much of the burden taken up by natural gas. In the end, according to the U.S. Energy Information Administration, much power kept flowing thanks to fossil fuels, nuclear and coal production.
What seems to be clear is that the Texas grid system was not prepared for a wave of equipment-freezing cold and soaring demand from people wanting to keep warm and operate their household equipment.

The failure of renewable wind supply was not the sole cause of the Texas blackouts. What were the other causes? Clearly a full review of the state’s energy policies is needed to get to the overall political, economic and technological background that created the conditions for massive failure. This is where the real lessons from the Texas ice storm will emerge and where the future of energy policy will be shaped, and not just in the United States.
Renewable advocates are scrambling to the defence of wind and solar, but the Texas case joins others around the world that suggest the great stampede to build wind and solar, fuelled by massive government subsidies and price-fixing regimes, comes with risks.
In Germany, a 2019 McKinsey report on the state of the nation’s power grid warned that “Germany has enjoyed a highly secure electricity supply for decades, but the tide is beginning to turn. The German power grid repeatedly faced critical situations in June of this year: significant shortfalls in available power were detected on three separate days. At its peak, the gap between supply and demand reached six gigawatts — equivalent to the output of six major power plants.”

The German problems continue. A Foreign Policy magazine commentary last week asked whether Germany is making too much subsidized renewable energy, risking more blackouts and price distortions. The McKinsey report warned of blackouts, continued high prices and of the need to increase electricity imports to offset the inconsistency in renewable power.

The German problem is in part the same one confronting Texas, which includes the same risks that are building in Britain, Australia and Canada, where the push for renewables keeps growing.
In Ontario, the latest renewables movement comes from city governments that are being cajoled by activists into shutting down natural gas plants — of the kind that are keeping Texas supplied with power today — and replacing them with wind and solar plants.
The Texas disaster has given American green activists a new sense of anxious urgency to keep their movement on track. U.S. Democrat Alexandria Ocasio-Cortez quickly pounced on the governor of Texas for blaming wind for the grid crisis, claiming it all could have been avoided if her Green New Deal had been adopted. In other words, she argued, more wind power would have saved the state from its wind power collapse.
Two weeks ago, smart money was betting big on renewables as a sure thing, pushing share values to new highs. Now, the ice storm has come and a new policy debate is just beginning.
6) Duggan Flanakin: The Myth (And Phony Math) Of ‘Green’ Jobs 
Eurasia Review, 22 February 2021
Governments are killing real jobs and conning us about ‘millions of good green jobs’

“Fool me once,” Stephen King wrote, “shame on you. Fool me twice, shame on me. Fool me three times, shame on both of us.” His adage certainly applies to the myth (and fake math) of green jobs.

During the 2020 election campaign, Joe Biden asserted that more than 3 million Americans are already “employed in the clean energy economy.” He then boasted that, “if executed strategically, our response to climate change can create more than 10 million well-paying jobs in the United States that will grow a stronger, more inclusive middle class … and not just in cities along the coasts.”
That would make Joe twice as boastful as his former boss, who promised the 2009 $787 billion stimulus package would create “over five million” green jobs. Four years later, the Brookings Institution reported that, “of the nearly 2.7 million ‘green jobs’ [the Obama-Biden Administration] identifies, most were bus drivers, sewage workers and other types of work that don’t fit the ‘green jobs of the future'” description.

Energy analyst David Blackmon later reported that Obama’s own Department of Labor acknowledged the initial failure to launch. DOL’s September 2011 report, “Recovery Act: Slow pace placing workers into jobs jeopardizes employment goals of the Green Jobs Program,” noted that only a third of the allocated funding had been spent; a fifth of the “degrees” and “certifications” went to people with a single day of training; and half of the “graduates” had five or fewer days of training. Just 2% of program participants held their jobs for at least six months.

The Bureau of Labor Statistics counted oil industry lobbyists as holding “green” jobs! The septic tank and portable toilet servicing industry had 33 times more “green” jobs than solar electric utilities. The BLS had to admit in a June 2012 report, “Green Technologies and Practices – August 2011,” that they could identify only 854,700 “green” jobs, including janitors and cleaners.

What a sham! Shame on them for trying to con us.
David Kreutzer pointed out in a Heritage Foundation report that steel workers had the most “green” industrial jobs. Why? Most U.S. steel is recycled scrap, and some steel gets used in making wind turbines. The next largest groups were bus drivers, waste collectors and used-merchandise store employees – followed finally by engineering and architectural services. The much hated nuclear industry accounted for over 80% of the 44,000 “green” electric utility jobs. There were five times as many “green” jobs in social advocacy (environmentalist group lobbyists) as in renewable electric power.
Ah, but that was then – and this is now, you say. Right.  

In January, the Associated Press reported on “Biden’s fuzzy math” regarding his claim of creating 1 million new auto industry jobs – even if he actually replaces the 650,000-government vehicle fleet with electric cars and installs 500,000 new EV charging stations – all at taxpayer expense. Theoretically, a huge government buying program will lower EV costs, and the myriad of charging stations will lessen fears of being stuck in a hurricane evacuation in a vehicle you cannot quickly gas up. Theoretically.

But hold on! Every electric vehicle job will likely come at the expense of a gasoline-engine vehicle job, and every EV charging station will diminish jobs in pipeline, refining, gasoline retail, gasoline delivery, and other sectors. The AP story adds that industry analysts and the United Auto Workers union agree that EV manufacturing will likely mean fewer automotive jobs. One reason is that EVs have far fewer parts and are simpler to build, thus require fewer workers, and often just need a new $6,000 battery module. Another is that battery manufacturing is easily automated. But that is hardly the whole story.

Back in 2019, while losing over a fifth of its U.S. market share of sales over a 3-year period, General Motors admitted it already employed more non-union auto workers in China than union workers in the USA. The harsh reality is that there are 10 times more electric vehicle battery manufacturing facilities in Asia than in all of North America. Maybe Jinping Joe Biden is talking about the number of Chinese “green” jobs. Especially child and near-slave labor in China’s mines and processing plants.
Other fact checkers have also found Biden Administration green jobs claims are “mostly false.”

Electric vehicles are just part of the Green New Biden Deal. Surrendering our economy to the Paris climate accords and its draconian environmental restraints is another. Abandoning oil, gas and coal – and very likely nuclear energy – and all the jobs those industries create is a third. Mr. Biden is merely following Germany and other European Union countries down the primrose path to economic suicide.

According to Deutsche Bank, climate policy regulation of Germany’s automotive sector is triggering “the biggest structural break in the industry in decades.” A bank report explains that strict carbon dioxide limits for new passenger cars in the EU for 2021 and 2030 are forcing manufacturers to prematurely switch to higher cost electric vehicles. The resultant price increases, the bank predicts, will have a very negative effect on future employment in the Germany auto industry.

One reason is that the EU’s CO2 limits for passenger cars and subsidies for electric vehicles are “extremely inefficient [expensive] and hardly effective instruments” to achieve emission reduction in the transport sector. While government incentives and mandates may push people toward buying government-favored vehicles, radical climate and energy policies decrease investment in energy-intensive sectors such as metals and chemicals. This will further increase the cost of new German cars.

Despite the push for green energy and electric vehicles, the German Trade Union Association reports that the number of “green” jobs in the German renewables sector had fallen from 300,000 in 2011 to just 150,000 in 2018. Many of these lost jobs were due to the collapse of Germany’s solar power industry, as companies were forced out of business by Chinese manufacturers that undercut German prices – and had much easier access to raw materials.

The track record for American renewable industry jobs vis-à-vis Chinese competition has mimicked the German experience. A primary reason is China’s near-monopoly on rare-earth metals essential for the Green revolution. Despite these realities, Biden “climate envoy” John Kerry recently said displaced American oil and gas workers can simply and easily go to work making solar panels.

Energy economist Tilak Doshi agrees the West’s fascination with renewables-only de-carbonization, and ultimately de-industrialization, is a recipe for economic suicide. He notes that Germany’s “green” world involves behemoth wind turbines with blades made of petroleum-based, fiberglass-reinforced resins; motors built with iron and rare earths extracted, processed and smelted using fossil fuels; concrete that also requires fossil fuels; and factories run on coal and natural gas. Solar panels have the same pedigree.
The result of this save-the-planet zeal? Germany has a burgeoning 17% poverty rate, thanks largely to its shutdown of reliable nuclear and fossil fuel power plants and the resultant skyrocketing electricity prices for homes, factories, businesses and hospitals over the past 15 years.
Full post
7) Walter Russell Mead: The Polar Bear Paradox
The Wall Street Journal, 23 February 2021
President Biden laid down a climate marker in his inaugural address: “A cry for survival comes from the planet itself. A cry that can’t be any more desperate or any more clear.”

He returned to the theme in his speech last week to the Munich Security Conference, calling the climate crisis “existential.”
For environmentalists, those are welcome words. The Trump years saw the U.S. leave the Paris Agreement while pursuing aggressive deregulation at home. Climate change is now back on the national agenda.
There are two mistakes observers can make about this new era of climate diplomacy. The first is to think it won’t last or will be limited to rhetoric. Climate skeptics and fossil-fuel interests should brace themselves. The fight to reduce global greenhouse-gas emissions and to shift the world’s energy systems toward much lower emissions isn’t going away. Key positions up and down the government bureaucracy will be filled by committed greens who have thought long and hard about how to use the powers of the regulatory state to achieve green goals. A host of new policies—and new regulations—are sure to come.
Those who dismiss ideas like the “green new deal” as mere left-wing fantasies miss the enormous appeal of these programs for corporations looking for new business opportunities. It isn’t only renewable energy companies looking for government mandates and funding. It’s major auto manufacturers dreaming of replacing every gasoline-powered car and truck on the planet with an electric vehicle—and reaping the public-relations reward of looking virtuous. It’s construction companies looking to replace the existing energy infrastructure.
But if skeptics underestimate the effect the climate movement will have on the world’s economy, greens are in danger of overestimating how much their efforts will help the polar bears. Paradoxically, as climate change assumes a more prominent place on the international agenda, climate activists will lose influence over climate policy.

Geopolitics and greed will get in the way. Greens see climate change as an existential threat to all humanity against which every country should unite. That is not how the world works. Countries inevitably see even the most urgent global problems through the lens of their own interests.

Countries don’t look at the climate problem with the same urgency or in the same way. Russia likes to sell oil and gas, wants the Arctic to become a major shipping route, and—despite some issues with tundra melt—doesn’t worry that Siberia will grow too warm.
Germany is locked into high-cost energy policies by domestic politics and the facts of geography. German industry would like to protect itself from imports made in countries where energy remains cheaper. The U.S. is so rich in cheap oil and gas that climate policy is a heavy political lift—and no binding climate treaty is likely to gain the two-thirds Senate majority for ratification. In New Delhi, no government can accept international agreements that slow India’s economic rise. Many Brazilians believe that the development of the Amazon basin is essential to their national future and won’t accept international limits on their activities there.

Westerners don’t need to bribe Beijing into environmentalism with political or economic concessions. China has more to fear from climate change than any other great power. Some of its major river systems depend on vulnerable Himalayan glaciers; its agricultural areas depend on rainfall patterns that climate change threatens to disrupt; its coast is exposed to devastating typhoons. Reducing China’s dependence on imported fuel eases Beijing’s fear that American sea power could cut it off from necessary resources in the event of a major crisis. China stands to benefit from a shift to electric cars and has invested heavily in solar panel and battery technology.

Yet this green zeal comes with “Chinese characteristics,” to use Deng Xiaoping’s phrase. China’s booming solar-power industry is heavily coal-dependent and based in Xinjiang. Are solar panels built with forced labor OK? Who decides?

Industry will also gain power over climate policy as climate moves up the world’s priority list. Business lobbies around the world are experts in regulatory capture and in diverting subsidies and mandates to serve corporate interests. It won’t be the greenest possible grid that wins the political contest; it will be the system that provides the most-entrenched interests with the highest rents that the best PR firms can present as sufficiently green. As lobbyists and green entrepreneurs rush to cash in on one of history’s greatest bonanzas, pigs will be adorned in green lipstick and white elephants dipped in green dye.

When it comes to determining priorities in our new green world, one thing’s for sure. The polar bears won’t get a vote.

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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