GWPF Newsletter: Europe returns to burning coal because of a shortage of natural gas

 

Global fossil fuel use similar to 10 years ago, new report

In this newsletter:

1) Europe returns to burning coal because of a shortage of natural gas
Bloomberg, 15 June 2021
 
2) Climate hypocrites united: US and Japan block G7 deal on coal
Politico, 13 June 2021
3) Reality check: Global fossil fuel use similar to 10 years ago
Reuters, 15 June 2021

 
4) India urges G7 nations to keep their unfulfilled $100 billion p.a. climate fund promise 
Mint News, 14 June 2021
 
5) John O'Sullivan: Net-Zero: the West's suicide note
The Pipeline, 13 June 2021

6) Tom Switzer: Reports of fossil fuels’ death are greatly exaggerated
The Australian, 15 June 2021

7) Still waiting for cost reductions

Global Warming Policy Forum, 15 June 2021 

8) And finally: Electric Carbon Battle Bus stranded at Eden Project after failing to find charging point in Cornwall
Cornwall Live, 13 June 2021

Full details:

1) Europe returns to burning coal because of a shortage of natural gas
Bloomberg, 15 June 2021

Europe is so short of natural gas that the continent — usually seen as the poster child for the global fight against emissions — is turning to coal to meet electricity demand that is now back to pre-pandemic levels.

Coal usage in the continent jumped 10% to 15% this year after a colder- and longer-than-usual winter left gas storage sites depleted, said Andy Sommer, team leader of fundamental analysis and modeling at Swiss trader Axpo Solutions AG. As economies reopen and people go back to the office, countries like Germany, the Netherlands and Poland turned to coal to keep the lights on.

Europe has long been at the forefront of the battle to reduce global warming. The continent has the world’s largest carbon market, charging the likes of utilities, steel producers and cement makers for polluting the environment. But even with record carbon prices this year, low gas reserves mean burning coal — the dirties of fossil fuels — has become more widespread again.

“Energy demand has been pretty strong in Europe and we have seen a recovery from the pandemic,” Sommer said in an interview. “Gas storage is so low now that Europe cannot afford to run extra power generation with the fuel.”

The return of coal is a setback for Europe ahead of the climate talks in Glasgow later this year. Leaders of the world’s biggest economies failed to set a firm date to end coal burning at the meeting of the Group of Seven at the weekend in Cornwall, U.K.

Europe faced freezing temperatures earlier this year, boosting demand for heating at a time liquefied natural gas cargoes were being sent to Asia instead. Russia sent less gas to the continent via Ukraine ahead of the start of the Nord Stream 2 link to Germany, expected later this year.

All of that mean that European storage is currently 25% below the five-year average and benchmark Dutch gas surged more than 50% this year. Futures are currently trading near their highest level for this time of the year since 2008.

Full story
 
2) Climate hypocrites united: US and Japan block G7 deal on coal
Politico, 13 June 2021

The climate unity of rich democracies foundered on their inability to commit to ending coal use.

FALMOUTH, England — At a global summit meant to showcase their efforts to rescue the climate, the leaders of the richest, most advanced countries on the planet were left stuck on the rock that fueled the 19th century.

Days of negotiations at the G7 leaders summit in Cornwall failed to set an end-date for coal after the U.S. and Japan blocked a deal.

The meeting was pitched as a moment for the group to set a benchmark for other countries to tackle emissions and scrub out fossil fuels ahead of the COP26 U.N. climate talks this November.

“We were clear this weekend that action has to start with us,” U.K. Prime Minister Boris Johnson told reporters immediately after the meeting ended Sunday.

But the Biden administration — fixated on cultivating the Democrats’ razor-thin Senate majority and the coal mining sympathies of West Virginia Senator Joe Manchin — was wary of any language specifically clamping down on coal.

White House press secretary Jen Psaki said: “We sought language that aligns with the president’s domestic commitments, including a carbon pollution free power sector by 2035. We secured that language.”

The 25-page final statement committed to “an overwhelmingly decarbonised power system in the 2030s” and to “accelerate the transition away from unabated coal capacity,” meaning coal without carbon capture technology.

The “overwhelming majority” of G7 members backed a phaseout in the 2030s, an EU official said. But Japan, which since the 2011 Fukushima nuclear accident has viewed coal power as critical to its energy security, was also opposed, according to someone with knowledge of the discussions.
 
Full story
 
3) Reality check: Global fossil fuel use similar to 10 years ago
Reuters, 15 June 2021

The share of fossil fuels in the world’s total energy mix is as high as a decade ago, despite the falling cost of renewables and pressure on governments to act on climate change, a report by green energy policy network REN21 showed on Tuesday.

Fossil fuel use has persisted amid rising global energy demand, continued consumption and investment in new fossil fuel plants, and lower use of biomass energy — such as wood or agricultural waste — in heating and cooking, the report said….
 
REN21 said the share of fossil fuels in the global energy mix was 80.2% in 2019, compared to 80.3% in 2009, while renewables such as wind and solar made up 11.2% of the energy mix in 2019 and 8.7% in 2009, the report said.
 
The rest of the energy mix comprises traditional biomass, used largely to cook or heat homes in developing countries….
 
“We are waking up to the bitter reality that the climate policy promises over the past ten years have mostly been empty words,” said Rana Adib, REN21’s executive director.
 
“The share of fossil fuels in final energy consumption has not moved by an inch,” she added.

Full story

 
4) India urges G7 nations to keep their unfulfilled $100 billion p.a. climate fund promise 
Mint News, 14 June 2021

India on Sunday called on the Group of Seven, or G7, nations to keep their unfulfilled promise of setting aside $100 billion annually to finance mitigation and transfer of technology to developing countries to meet the challenges posed by climate change, Indian officials said...

On Sunday, Prime Minister Modi spoke on “climate change" and “open societies", he said.
 
“The prime minister highlighted the need for climate action to include all dimensions of mitigation, adaptation, technology transfer, financing and equity, climate justice and lifestyle change to provide the necessary space for developing countries to grow and called on the G7 to meet their unfulfilled promise of $100 billion annually in climate finance," he said.
 
Developed countries had first promised to put aside $100 billion a year at the 2009 Copenhagen climate summit and reiterated the pledge later.
 
Full story
 
5) John O'Sullivan: Net-Zero: the West's suicide note
The Pipeline, 13 June 2021

In the 1983 U.K. general election, the Labour Party under the amiably leftish leadership of Michael Foot published a manifesto that amounted to a wish-list of extreme socialist policies long sought by the party’s Marxist wing. It leant so far to the left that one of Foot’s closest colleagues, the late Gerald Kaufman, described it privately (in a bon mot that was soon leaked) as “the longest suicide note in history.”

Not any longer. The last few weeks have seen two longer suicide notes by two organizations more important than an opposition U.K. party. They are the G7 nations, which Marx might have described as “the executive committee of the global capitalist democracies”—aka the West—and the International Energy Agency which is a specialized committee of the United Nations system and as such the globalist bureaucracy serving all U.N. member-states.

The distinctions between the two organizations are not trivial, but they usually say the same things, especially on climate change. Indeed, the global organization of anxiety over climate change was initially launched by the U.N. Secretariat in a series of international conferences—Rio, Kyoto, Copenhagen—at the end of the Cold War. Its greatest support to date has been found in the G7 countries, especially in the United Kingdom and the European Union (minus coal-producing countries such as Poland) where it has become unchallengeable dogma.

America has been the exception to the G7’s enthusiasm, having repeatedly refused to ratify any of the climate change treaties even when, as now, the U.S. administration was in the hands of climate “emergency” zealots who signed them. Partly as a result, the United States under the Trump administration was able both to reduce its carbon emissions and to re-emerge as an energy super-power by liberating “clean, green” natural gas from the land by fracking.

Oddly, even masochistically, President Biden was elected to reverse this policy and to embrace the Paris conference aim of achieving Net-Zero emissions by 2050. Seeing this as an opportunity to entrench Net-Zero as a legally-binding international obligation on all governments, the G7 and the IEA each issued a report at around the same time, respectively making the political and the technical case for the inevitability of Net-Zero.

There was neither deception nor coyness about this simultaneity; the G7 applauded the IEA for its help. And the joint advocacy is expected to generate overwhelming diplomatic endorsement all the way to the next climate conference this fall in Glasgow. You can read the G7 report here and the IEA report here.

But you should read both with a skeptic eye. Here, for instance, is one of the most important paragraphs in the G7 report [italics mine]:

"In this context, we will phase out new direct government support for carbon intensive international fossil fuel energy, except in limited circumstances at the discretion of each country, in a manner that is consistent with an ambitious, clearly defined pathway towards climate neutrality in order to keep 1.5°C within reach, in line with the long-term objectives of the Paris Agreement and best available science. Consistent with this overall approach and recognizing that continued global investment in unabated coal power generation is incompatible with keeping 1.5°C within reach, we stress that international investments in unabated coal must stop now and commit to take concrete steps towards an absolute end to new direct government support for unabated international thermal coal power generation by the end of 2021, including through Official Development Assistance, export finance, investment, and financial and trade promotion support. We commit to reviewing our official trade, export and development finance policies towards these objectives. We further call on other major economies to adopt these commitments."

Sounds impressive, right? It’s a wordy elaboration of the idea—relentlessly canvassed in climate emergency propaganda—that we can kill coal by cutting off government subsidies to it and thus making it a bad investment. But as my italics show, the governments are building escape hatches into their commitments at almost every point. They will phase out new and direct government subsidies to coal except in limited circumstances at the discretion of each country, i.e., when a government wants to subsidize coal.

Similarly, they’ll take concrete steps to end subsidies for unabated coal. That’s interesting. The official definition of unabated coal is “the use of coal without any technologies to substantially reduce its CO2 emissions, such as carbon capture and storage.” Carbon capture is the technology, still in large part theoretical, that’s cited as one important way in which carbon emissions can be reduced or eliminated in, for instance, the manufacture of concrete. You can be sure that when carbon capture has become a more practical possibility—or even before that—the governments of coal-producing countries will find that their coal is magically no longer unabated.

And they would have a point. The possibility of carbon capture makes the case against fossil fuels much less strong than it otherwise seems—and certainly more attractive than the policies and lifestyle changes that the IEA report lists as necessary to the achievement of Net-Zero.

I’ve written many times before about the lifestyle changes and their lack of electoral appeal. Here’s Irwin Stelzer, the U.S. economist and entrepreneur, making those points with dispatch:

"It is simply unrealistic to expect the world’s politicians to rally support for net-zero emissions by 2050 by telling them there can be no more oil and gas furnaces for sale by 2025, half of air travel will have to cease unless emissions-free fuels are developed, car trips must be replaced with walking and cycling, no permits will be issued to develop new oil and gas fields, and no coal plant will be constructed unless fitted with currently unavailable emission-catching equipment."

That unrealism becomes more risky when we look at the IEA’s coldly realistic analysis of the innovations that will be required to make these lifestyle sacrifices worthwhile in terms of emissions reduction:

"Innovation cycles for early stage clean energy technologies are much more rapid in the NZE  than what has typically been achieved historically, and most clean energy technologies that  have not been demonstrated at scale today reach markets by 2030 at the latest. This means  the time from first prototype to market introduction is on average 20 percent faster than the fastest  energy technology developments in the past, and around 40 percent faster than was the case for  solar PV."

What’s being proposed by the G7 and IEA is a vast leap into the dark—maybe the literal dark unless renewables become much more reliable than they have been to the present.

That may be why the  G7’s final plea in the quote above: "We further call on other major economies to adopt these commitments” shows no sign of being accepted and implemented by either the big energy-producing countries (Russia, Saudi Arabia, Australia) or the big energy-consuming countries (India, China, and most of the Third World).

Maybe the G7 should heed the IEA’s warning that without such international cooperation, Net-Zero simply can’t be achieved. And if possible, before we’ve spent our children’s and grandchildren's inheritance on it.


6) Tom Switzer: Reports of fossil fuels’ death are greatly exaggerated
The Australian, 15 June 2021

The green lobby claims that fossil fuels are on borrowed time and that wind power and solar panels will transform the energy landscape. But they are mistaken.


 
Great efforts are under way to decarbonise the global economy. It’s not just that Western political leaders pledge commitments to net-zero emissions by 2050 or shortly thereafter. Corporations are also investing in a green-energy future as if a carbon-free world is a fait accompli.

The trends are clear. Oil and gas companies lose shareholder battles to climate activists. Automakers plan to go electric in the next decade. And financial institutions divest their managed funds from corporations invested in fossil fuels.

However, reports of carbon’s death are greatly exaggerated. Although it seems sensible to wean the world off oil, coal and natural gas, the transition to 100 per cent renewable energy is almost certainly unrealistic. Indeed, notwithstanding the construction of new wind turbines and solar farms, the world will need fossil fuels for many more decades.

As one of the world’s most distinguished energy analysts, Daniel Yergin, argues, the shift to a net carbon-zero world “is likely to take longer, to be more expensive and to require more technical innovation than many now anticipate”.

The world depends on fossil fuels for about 80 per cent of its energy. And in the 2020s, government budgets promoting the energy transition will be constrained by the heavy debt burden accumulated in the wake of the coronavirus crisis and the world’s worst recession in seven decades.

According to the International Energy Agency, carbon emissions will increase by 5 per cent in 2021, with huge investment in coal-fired power stations across the non-OECD world.

Simply put, the policy to eliminate coal and especially oil and natural gas within three decades is not a cost-free-exercise: it would hurt nations in terms of higher costs up and down the energy chain and countless lost jobs in carbon-intensive industries.

The green lobby claims that fossil fuels are on borrowed time and that wind power and solar panels will transform the energy landscape.
But they are mistaken.

Writing in The New Map: Energy, Climate and the Clash of Nations (Penguin, 2020), Professor Yergin argues that “oil will maintain a pre-eminent position as a global commodity, still the primary fuel that makes the world go round”.

Solar and wind power still provide just a tiny share of the world’s total energy. They also struggle to replicate the reliability of oil and gas: today’s best rechargeable batteries for renewables have only a fraction of the energy density of hydrocarbons from gas and oil; so until this problem is rectified, there will always be a place for gas and oil…..

In any case, the declining emissions of the developed world are likely to be dwarfed by the increasing emissions of the non-OECD world. These nations account for about 65 per cent of annual global emissions, as they try to grow their economies, reduce poverty and raise living standards.

Full op-ed ($)
 

7) Still waiting for cost reductions
Global Warming Policy Forum, 15 June 2021

Latest data reveals no revolution in offshore wind costs

The publication last week of the annual report of Rampion Offshore Windfarm marked the start of the 2020 reporting season – most of the UK’s offshore fleet will publish their accounts in the next three months. This new information gives us here at GWPF a chance to update our estimates of the levelised costs of the fleet.
 
Long-time readers here will recall that there is an ongoing controversy over offshore wind in the UK, with the Government and renewables advocates insisting that costs are falling through the floor, while a series of studies of financial accounts show that they are at best only falling modestly, and then from a dizzy height.
 
The Government insistence that we are in the midst of a cost revolution is based on the very low offers to supply power to the grid that offshore windfarms started making in 2017. However, it has been pointed out that these so-called Contracts for Difference are not binding, and claims of low costs were anyway refuted by the announcements of windfarm developers themselves, which revealed little change.
 
The new reporting season gives us a chance to see if the actual build costs of the newest, (allegedly) super-cheap windfarms are coming in below budget, or if the operating costs of slightly older ones are markedly cheaper.
 
Although the accounts may take a few months to appear, we can already get hints about the performance of some of these windfarms from other places. Take Triton Knoll for example, an 860 MW development off the Lincolnshire coast, Phase 1 of which switched on in March this year. It has a Contract for Difference currently worth £89/MWh. However, its announced cost is £3 billion, which, on a very optimistic estimate of its performance, would indicate that it needs to earn £67/MWh just to cover its capital costs.
 
And optimism about its performance doesn’t appear warranted. Data from the Low-carbon Contracts Company, which runs the CfD scheme, suggests that Triton Knoll’s performance – its “load factor” – is a few percentage points worse than that of Hornsea 1. So there has certainly been no revolution in operating performance. The figures we see are just what you’d expect, since Hornsea is a bit further out in the North Sea, and at similar latitude. But Hornsea’s annual average is 47%. At, say, 45%, Triton Knoll would need to earn £75/MWh or so to cover its capital costs.
 
In other words, there will not be a lot of the £89/MWh CfD income left to cover operating costs, which are unlikely to be less than £40/MWh. I’d therefore assume Triton Knoll’s 2021 accounts, still more than a year away, to show a substantial loss.
 
Assuming, that is, there are no surprises in the capital costs in the accounts. I will report back when these appear.

 

8) And finally: Electric Carbon Battle Bus stranded at Eden Project after failing to find charging point in Cornwall
Cornwall Live, 13 June 2021

A fully-electric coach has found itself stranded in Cornwall after being unable to charge at five different locations across the Duchy.



The Carbon Battle Bus is on a tour of the UK and this week travelled from London to Cornwall but was unable to complete its tour after finding charging points did not work.

It came to Cornwall to tie in with the G7 Summit in Carbis Bay where world leaders have been discussing climate change and the need to reach targets for zero carbon.

Planet Mark, the organisers of the Zero Carbon Tour, successfully travelled from London to the Eden Project, a distance of 263 miles with one recharge, in the electrically-powered Yutong coach.

However, in order to make the return leg through the South West of England the coach needs a recharge.

But with 60 to 70 miles it has found that there are no serviceable chargers left on the network and the five that they attempted to use in Cornwall were unable to charge the bus......

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.