In this newsletter:
1) Germany's biggest Net Zero debacle: Siemens faces $5 billion loss on faulty wind turbines
Bloomberg, 7 August 2023
2) Not enough wind deals costly blow for Renewables Infrastructure Group
The Times, 7 August 2023
3) Wind ‘Turbinegeddon’ is a Troubling Climate Omen
The Washington Post, 7 August 2023
4) Germany's green Wirtschaftswunder: German consumers 'pay the highest electricity prices in Europe'
The Local, 7 August 2023
5) German industry boss warns: "De-industrialisation has begun"
Frankfurter Allgemeine Zeitung, 4 August 2023
Frankfurter Allgemeine Zeitung, 4 August 2023
6) Gordon Hughes: Keir Starmer says Just Stop Oil’s demands are ‘contemptible’ – and he is right
The Daily Telegraph, 7 August 2023
7) John Hinderaker: EVs are on a collision course with reality
Powerline, 6 August 2023
8) Tom Ryan: The UK’s Net Zero zealotry is harming the world’s poor
Spiked, 6 August 2023
9) Net Zero flop: Orkney’s Sea Snake wave energy generator to be scrapped
The Times, 5 August 2023
The Times, 5 August 2023
10) Reminder: Net Zero policy already costing at least £2000 per household
Net Zero Watch, July 2022
Net Zero Watch, July 2022
Full details:
1) Germany's biggest Net Zero debacle: Siemens faces $5 billion loss on faulty wind turbines
Bloomberg, 7 August 2023
Siemens Energy AG launched a strategic review of its wind power business as problems with its turbines are expected to cause a €4.5 billion ($5 billion) net loss in one of industrial Germany’s biggest debacles.
Bloomberg, 7 August 2023
Siemens Energy AG launched a strategic review of its wind power business as problems with its turbines are expected to cause a €4.5 billion ($5 billion) net loss in one of industrial Germany’s biggest debacles.
The shares fell as much as 5.1% after the company disclosed the loss, which follows repeated setbacks for the German manufacturer in getting to grips with quality flaws. Previously the company expected a net loss of roughly €1 billion in the year through September.
“It has been a very demanding quarter,” Chief Executive Officer Christian Bruch said Monday in an interview with Bloomberg Television. The company is now reviewing different elements in its wind business, he added, as the problems “delay our path to profitability” for the division.
The announcement marks the first update from Siemens Energy after it scrapped its annual profit guidance in June. At the time, its shares slumped by a record after the company said technical problems with onshore turbines from its Spanish subsidiary Siemens Gamesa could cost more than €1 billion to resolve. Shares have remained more than 30% lower than before the disclosure, which follows a number of issues in fixing problems with the turbines.
On Monday, Siemens Energy said it expects €1.6 billion in repair costs to fix flaws in Gamesa’s onshore turbines. Quality problems can occur in “certain rotor blades and main bearings in the 4.X and 5.X platforms,” according to a statement. A limited number of onshore turbines are affected, which can still be operated. The main part of the repair costs is expected over the next two fiscal years.
In addition, the company detailed issues in its offshore business, where higher product costs and ramp-up challenges incurred charges of €600 million during the fiscal third quarter through June. The higher outlays mean Siemens Energy is making a loss on certain contracts if customers take delivery.
Adding to the expected annual net loss is a €700 million writedown of deferred tax assets during the fiscal year through September. Despite the additional charges, Siemens Energy has cash and cash equivalents of around €4.3 billion.
To contain the fallout from its quality problems at Gamesa, Siemens Energy is trying to delay delivery of new wind turbines from its troubled 5.X platform by as much as seven months, people familiar with the matter have said.
The company will give details on its wind business review in November during an investor day.
While the wind turbine problems at Gamesa weigh on earnings and outlook, revenue and profit in the company’s gas turbine and grid technology segments rose.
During the fiscal third quarter through June, revenue rose 8% to €7.5 billion on strong orders for the German maker’s gas turbines and grid technologies units. Net losses ballooned more than five-fold to €2.93 billion as as the costs of fixing issues at its Gamesa units drag on earnings.
Full story
2) Not enough wind deals costly blow for Renewables Infrastructure Group
The Times, 7 August 2023
“It has been a very demanding quarter,” Chief Executive Officer Christian Bruch said Monday in an interview with Bloomberg Television. The company is now reviewing different elements in its wind business, he added, as the problems “delay our path to profitability” for the division.
The announcement marks the first update from Siemens Energy after it scrapped its annual profit guidance in June. At the time, its shares slumped by a record after the company said technical problems with onshore turbines from its Spanish subsidiary Siemens Gamesa could cost more than €1 billion to resolve. Shares have remained more than 30% lower than before the disclosure, which follows a number of issues in fixing problems with the turbines.
On Monday, Siemens Energy said it expects €1.6 billion in repair costs to fix flaws in Gamesa’s onshore turbines. Quality problems can occur in “certain rotor blades and main bearings in the 4.X and 5.X platforms,” according to a statement. A limited number of onshore turbines are affected, which can still be operated. The main part of the repair costs is expected over the next two fiscal years.
In addition, the company detailed issues in its offshore business, where higher product costs and ramp-up challenges incurred charges of €600 million during the fiscal third quarter through June. The higher outlays mean Siemens Energy is making a loss on certain contracts if customers take delivery.
Adding to the expected annual net loss is a €700 million writedown of deferred tax assets during the fiscal year through September. Despite the additional charges, Siemens Energy has cash and cash equivalents of around €4.3 billion.
To contain the fallout from its quality problems at Gamesa, Siemens Energy is trying to delay delivery of new wind turbines from its troubled 5.X platform by as much as seven months, people familiar with the matter have said.
The company will give details on its wind business review in November during an investor day.
While the wind turbine problems at Gamesa weigh on earnings and outlook, revenue and profit in the company’s gas turbine and grid technology segments rose.
During the fiscal third quarter through June, revenue rose 8% to €7.5 billion on strong orders for the German maker’s gas turbines and grid technologies units. Net losses ballooned more than five-fold to €2.93 billion as as the costs of fixing issues at its Gamesa units drag on earnings.
Full story
2) Not enough wind deals costly blow for Renewables Infrastructure Group
The Times, 7 August 2023
Calm weather hit The Renewables Infrastructure Group in the first half of the year, with its wind farms generating significantly less electricity than had been expected.
The London-listed investment group said its output had been “predominantly driven by low wind resource in the UK”, although this had been partially offset by stronger generation from its solar farms.
The company, widely known as Trig, has interests in renewable energy spanning offshore wind, onshore wind, solar panels and battery storage throughout Europe, with a total capacity of 2.8 gigawatts. Its assets include a 10 per cent stake in the Hornsea One wind farm off the coast of Yorkshire, as well as stakes in two projects off East Anglia and one off Scotland. Trig said it had completed five construction projects in the first half, including a solar scheme in Spain and an onshore wind farm in Sweden, adding a combined 310 megawatts.
Its assets generated enough electricity to power 1.7 million homes in the first half, up from 1.6 million homes last year, as lower wind speeds largely offset the increased capacity.
Onshore UK wind farms were the weakest part of the portfolio, generating 21 per cent less electricity than expected, although the entire wind portfolio produced less than expected. Solar farms generated 2 per cent more power than forecast, resulting in the portfolio as a whole producing 9 per cent below the company’s target.
Full story
Siemens Energy AG’s woes stem chiefly from technical problems with a new generation of onshore wind turbines. Wind power is vital to cutting carbon emissions, and the industry has raced to launch bigger and more powerful machines.
But the Siemens Gamesa wind business moved too fast and has now discovered abnormal vibrations arising from blades and bearings which may have to be replaced.
While the affected models represent only 4% of its installed fleet, the direct costs of rectifying the problems are estimated at €1.6 billion. The company faces further unexpected costs related to ramping up production of offshore turbines, as well as unfavorable tax effects. Bernstein Research analyst Nicholas Green has evocatively dubbed the problems Turbinegeddon.
The wind industry should be flying high but instead is entrapped by a cornucopia of troubles. Projects are too often held up by red tape and nimbyism, while contracts signed years ago have become onerous due to material and logistics cost inflation. Chinese companies that dominate their home market are looking increasingly to expand overseas, pressuring pricing.
An even bigger concern is that powerful new turbines may prove unreliable — small component irregularities can cause turbines to malfunction. The rotors of a high-spec onshore model span 170 meters and a nacelle (the central structure) can weigh several hundred tons (the latest offshore turbine designs are even larger). Needless to say, it’s not straightforward to repair massive equipment high above the ground and compensate wind park owners for forgone electricity production. Though Siemens Energy may be able to recoup some money from subcontractors and suppliers, most of the financial risks often lie with the manufacturer.
Vestas Wind Systems A/S and General Electric Co. have had their own warranty issues, but one can’t necessarily conclude the entire industry has a problem. Gamesa has many homemade issues: the business has had six leadership changes in as many years, notes Bernstein. Oversight of its supply chain and communication about potential issues seem to have been lacking.
Regrettably, the latest problems became apparent only after Siemens Energy completed a €4 billion buyout of Gamesa’s minority investors in December, thus ensuring even more of the financial risk accrued to itself. (For its part, German engineering giant Siemens AG is looking to to reduce its part ownership of Siemens Energy; for now it owns a 32% stake, spread across the company and its pension arm.)
Full story
4) Germany's green Wirtschaftswunder I: German consumers 'pay the highest electricity prices in Europe'
The Local, 7 August 2023
The London-listed investment group said its output had been “predominantly driven by low wind resource in the UK”, although this had been partially offset by stronger generation from its solar farms.
The company, widely known as Trig, has interests in renewable energy spanning offshore wind, onshore wind, solar panels and battery storage throughout Europe, with a total capacity of 2.8 gigawatts. Its assets include a 10 per cent stake in the Hornsea One wind farm off the coast of Yorkshire, as well as stakes in two projects off East Anglia and one off Scotland. Trig said it had completed five construction projects in the first half, including a solar scheme in Spain and an onshore wind farm in Sweden, adding a combined 310 megawatts.
Its assets generated enough electricity to power 1.7 million homes in the first half, up from 1.6 million homes last year, as lower wind speeds largely offset the increased capacity.
Onshore UK wind farms were the weakest part of the portfolio, generating 21 per cent less electricity than expected, although the entire wind portfolio produced less than expected. Solar farms generated 2 per cent more power than forecast, resulting in the portfolio as a whole producing 9 per cent below the company’s target.
Full story
3) Wind ‘Turbinegeddon’ is a troubling climate omen
The Washington Post, 7 August 2023
The Washington Post, 7 August 2023
The financial cost of decades of climate inaction (sic) and the risks inherent in rushing to catch up were laid bare on Monday when a German industrial giant forecast a jaw-dropping €4.5 billion ($5 billion) annual loss.
Siemens Energy AG’s woes stem chiefly from technical problems with a new generation of onshore wind turbines. Wind power is vital to cutting carbon emissions, and the industry has raced to launch bigger and more powerful machines.
But the Siemens Gamesa wind business moved too fast and has now discovered abnormal vibrations arising from blades and bearings which may have to be replaced.
While the affected models represent only 4% of its installed fleet, the direct costs of rectifying the problems are estimated at €1.6 billion. The company faces further unexpected costs related to ramping up production of offshore turbines, as well as unfavorable tax effects. Bernstein Research analyst Nicholas Green has evocatively dubbed the problems Turbinegeddon.
The wind industry should be flying high but instead is entrapped by a cornucopia of troubles. Projects are too often held up by red tape and nimbyism, while contracts signed years ago have become onerous due to material and logistics cost inflation. Chinese companies that dominate their home market are looking increasingly to expand overseas, pressuring pricing.
An even bigger concern is that powerful new turbines may prove unreliable — small component irregularities can cause turbines to malfunction. The rotors of a high-spec onshore model span 170 meters and a nacelle (the central structure) can weigh several hundred tons (the latest offshore turbine designs are even larger). Needless to say, it’s not straightforward to repair massive equipment high above the ground and compensate wind park owners for forgone electricity production. Though Siemens Energy may be able to recoup some money from subcontractors and suppliers, most of the financial risks often lie with the manufacturer.
Vestas Wind Systems A/S and General Electric Co. have had their own warranty issues, but one can’t necessarily conclude the entire industry has a problem. Gamesa has many homemade issues: the business has had six leadership changes in as many years, notes Bernstein. Oversight of its supply chain and communication about potential issues seem to have been lacking.
Regrettably, the latest problems became apparent only after Siemens Energy completed a €4 billion buyout of Gamesa’s minority investors in December, thus ensuring even more of the financial risk accrued to itself. (For its part, German engineering giant Siemens AG is looking to to reduce its part ownership of Siemens Energy; for now it owns a 32% stake, spread across the company and its pension arm.)
Full story
4) Germany's green Wirtschaftswunder I: German consumers 'pay the highest electricity prices in Europe'
The Local, 7 August 2023
For the second year in a row, consumers in Germany have paid the most for electricity in a Europe-wide comparison, according to a new report.
After the Bundesrepublik took the Europe-wide lead from Denmark in 2019 for the highest electricity prices, the costs have increased again in 2020, as shown in new figures from the Federal Statistical Office published on Monday.
Prices also rose for larger households with an annual consumption of 3,500 kilowatt hours: They reportedly paid an average of 30.43 cents per kilowatt-hour, up from 29.83 cents a year earlier.
According to the Federal Statistical Office, average electricity prices in Europe fell last year: in the euro area they dropped 0.53 cents to 22.47 cents per kilowatt hour.
And in the 27 countries of the European Union they went down by 0.51 cents to 21.26 cents.
Full story
6) Gordon Hughes: Keir Starmer says Just Stop Oil’s demands are ‘contemptible’ – and he is right
The Daily Telegraph, 7 August 2023
It’s unlikely that a world without fossil fuels can sustain current levels of real income and population
“Contemptible.” That is how Sir Keir Starmer views Just Stop Oil’s message to turn off the taps in the North Sea – and he’s right.
A key JSO target is to eliminate all use of fossil fuels by 2030. There are two ways of interpreting this goal. The Augustinian interpretation (“Please make me virtuous, but not yet!”) would rule out direct use of fossil fuels in the UK but not the import and use of goods and services produced elsewhere using fossil fuels.
This is an extreme version of what has essentially been our strategy for the last 15 years, which is to outsource carbon emissions to China and other countries while pretending to be a world leader.
In contrast, the Fundamentalist interpretation would rule out any direct or indirect use of fossil fuels.
In effect, that would mean likely reverting to an isolated medieval economy with less than 10pc of the current population.
With current technologies, even a fully renewable energy system cannot operate without equipment and inputs produced using fossil fuels somewhere in the supply chain, such as coal in China.
Since few people or politicians will sign up to such an outcome, the Augustinian interpretation often seems a more moderate alternative. That is the flavour of the policies advocated by the Labour Party, despite Starmer’s recent intervention, and green groups.
Still, JSO’s goal is not accompanied by any concrete plans for implementation, other than vague assertions about alternative technologies.
Readers may be familiar with some of the well-publicised items – wind and solar farms, electric vehicles, and heat pumps – so I will focus on the rest of the economy, starting with transport.
Remember that the UK is a country which can’t build a small high-speed railway line in less than 20 years while spending two to three times the original cost. It has botched every major rail electrification project in the last 30 years.
To meet the JSO target we would have to electrify every mile of non-electrified railway in less than eight years or undergo a new Beeching closure programme.
To even contemplate the schedule, we would have to close all non-electrified routes temporarily for periods of two to five years.
Think, too, of the expenditure. All emergency programmes of this type tend to incur costs that are double or more what they might cost with a longer timeframe and better planning.
What about road transport? Viable electric HGVs are more a matter of hype than a practical proposition. Replacing more than 5.3m goods vehicles and buses in eight years, even if it were possible, could cost more than £500bn.
In practice, since the ranges of such vehicles are likely to be much lower than their diesel predecessors, the distribution system would have to be reorganised with much higher capital and operating costs.
Next, there is gas. Everyone focuses on home heating, but nearly 65pc of gas consumption occurs in commerce and industry.
Shutting down gas use will lead to the effective closure of most of the remaining manufacturing industry in the UK. It will impose large capital and operating costs on most commercial and service businesses as well as all public services.
The current idea of using hydrogen as an alternative is not feasible, especially over such a short timescale.
Even activities which are not significant users of gas will face the direct or indirect costs of insuring against the inherent intermittency of wind and solar power.
Of course, things might be different with massive investments in nuclear power, but again the UK can’t build a single large nuclear plant within a decade.
A final example is agriculture, fishing and forestry, one of the most oil-dependent sectors.
Two centuries ago, the UK was unable to produce sufficient agricultural and other products to meet the needs of a population of less than 15m.
Now, we have a population more than 4.5 times higher but without the direct and indirect use of fossil fuels we would revert to the technological level of the mid-nineteenth century.
In addition, many green activists want to replace agriculture with reforestation and rewilding, the reverse of what happened from the eighteenth to twentieth centuries. All of this is possible, but only with a large increase in food and other agricultural imports.
JSO’s Augustinian model for the UK is that of a country with a greatly reduced standard of living and population that is almost entirely dependent on material imports from places that are less concerned about using fossil fuels.
These would be paid for by a post-industrial or service economy. But even that does not work in practice.
How are food, materials and industrial products imported into an island with a single electrified link to the rest of the world? Sailing ships? Or a fleet of nuclear-powered cargo ships? The shipping industry relies almost entirely on fossil fuels and that is not going to change in eight years or even 18 years.
And without cheap air travel, how is the UK to deliver the services that are supposed to pay for the imports of material goods? Tourists need to travel as do the consumers or suppliers of cultural and educational exports.
Similarly for financial, professional, technical and other services. The UK is not Luxembourg – it has more than 100 times the population and is not within a short distance of some of the richest economic zones in the world.
JSO’s vision of the UK in 2030 is simply fantasy, less stimulating than Kipling’s Just So stories and not suitable for reading to either children or adults.
In truth, it seems very unlikely that a world without fossil fuels can sustain current levels of real income and population with foreseeable technologies, let alone meeting the expectations of developing countries. Contemptible indeed.
Professor Gordon Hughes is a retired Professor of Economics at the University of Edinburgh, and a former senior adviser on energy and environmental policy at the World Bank
7) John Hinderaker: EVs are on a collision course with reality
Powerline, 6 August 2023
After the Bundesrepublik took the Europe-wide lead from Denmark in 2019 for the highest electricity prices, the costs have increased again in 2020, as shown in new figures from the Federal Statistical Office published on Monday.
Prices also rose for larger households with an annual consumption of 3,500 kilowatt hours: They reportedly paid an average of 30.43 cents per kilowatt-hour, up from 29.83 cents a year earlier.
According to the Federal Statistical Office, average electricity prices in Europe fell last year: in the euro area they dropped 0.53 cents to 22.47 cents per kilowatt hour.
And in the 27 countries of the European Union they went down by 0.51 cents to 21.26 cents.
Full story
5) German industry boss warns: "De-industrialisation has begun"
Frankfurter Allgemeine Zeitung, 4 August 2023
The chemicals group Lanxess may be planning to close two production facilities at its Krefeld-Uerdingen site in view of the high price of electricity and the general economic conditions. Due to the high energy costs, German industry has enormous competitive disadvantages in Germany. "De-industrialisation has begun," said Zachert.
The hexane oxidation is extremely energy-intensive and should be shut down by 2026, the Cologne-based M-Dax group announced on Friday. "We've been burning money here for some time, and we don't expect that to change," said Lanxess CEO Matthias Zachert in a conference call.
The chromium oxide production at the same location has also been underutilized for months because more and more ceramic manufacturers from Germany, who are among the customers there, are withdrawing due to the economic situation. According to Lanxess, it is trying to sell this area; if that does not work, this company with its 52 employees is also threatened with closure. 61 employees work in hexane oxidation.
Decommissioning for competitiveness
Lanxess has to shut down the plants in order to remain competitive. Zachert held politics responsible for this. Due to the high energy costs, German industry has enormous locational disadvantages in Germany. This is how companies migrated. "De-industrialisation has begun," said Zachert. In addition to the high costs, companies suffered from excessive bureaucracy. "This is seriously endangering German prosperity and social security for people in the medium and long term." The federal government must wake up, said Zachert. "We need an economic policy worthy of the name."
In addition to the planned closures, Lanxess is also setting up a savings plan. In order to support its results for the current financial year in the short term, there is a Europe-wide hiring freeze, and costs are to be cut everywhere. The board of directors will waive a quarter of their fixed salary, and bonuses will also be significantly reduced at lower levels. Investments of 50 million euros that were actually planned will be postponed, which should save a total of 100 million euros this year.
In addition, the group is analyzing its energy-intensive operations and facilities and intends to streamline its administration in the medium term. There will probably also be job cuts, which Zachert has not yet quantified in more detail. The group estimates 100 million in one-off costs for this, compared to annual cost savings of 150 million euros from 2025.
Other chemical companies are also making increasing savings
Other chemical companies are also increasingly making cuts, although Lanxess is the first company to come up with another savings program. For example, the Essen-based specialty chemicals group Evonik will refrain from hiring new employees until the end of the year, has significantly reduced travel budgets and reduced consultant costs - this should save 250 million euros this year. The plastics group Covestro is also turning all cost screws.
Full story (in German)
Frankfurter Allgemeine Zeitung, 4 August 2023
The chemicals group Lanxess may be planning to close two production facilities at its Krefeld-Uerdingen site in view of the high price of electricity and the general economic conditions. Due to the high energy costs, German industry has enormous competitive disadvantages in Germany. "De-industrialisation has begun," said Zachert.
The hexane oxidation is extremely energy-intensive and should be shut down by 2026, the Cologne-based M-Dax group announced on Friday. "We've been burning money here for some time, and we don't expect that to change," said Lanxess CEO Matthias Zachert in a conference call.
The chromium oxide production at the same location has also been underutilized for months because more and more ceramic manufacturers from Germany, who are among the customers there, are withdrawing due to the economic situation. According to Lanxess, it is trying to sell this area; if that does not work, this company with its 52 employees is also threatened with closure. 61 employees work in hexane oxidation.
Decommissioning for competitiveness
Lanxess has to shut down the plants in order to remain competitive. Zachert held politics responsible for this. Due to the high energy costs, German industry has enormous locational disadvantages in Germany. This is how companies migrated. "De-industrialisation has begun," said Zachert. In addition to the high costs, companies suffered from excessive bureaucracy. "This is seriously endangering German prosperity and social security for people in the medium and long term." The federal government must wake up, said Zachert. "We need an economic policy worthy of the name."
In addition to the planned closures, Lanxess is also setting up a savings plan. In order to support its results for the current financial year in the short term, there is a Europe-wide hiring freeze, and costs are to be cut everywhere. The board of directors will waive a quarter of their fixed salary, and bonuses will also be significantly reduced at lower levels. Investments of 50 million euros that were actually planned will be postponed, which should save a total of 100 million euros this year.
In addition, the group is analyzing its energy-intensive operations and facilities and intends to streamline its administration in the medium term. There will probably also be job cuts, which Zachert has not yet quantified in more detail. The group estimates 100 million in one-off costs for this, compared to annual cost savings of 150 million euros from 2025.
Other chemical companies are also making increasing savings
Other chemical companies are also increasingly making cuts, although Lanxess is the first company to come up with another savings program. For example, the Essen-based specialty chemicals group Evonik will refrain from hiring new employees until the end of the year, has significantly reduced travel budgets and reduced consultant costs - this should save 250 million euros this year. The plastics group Covestro is also turning all cost screws.
Full story (in German)
6) Gordon Hughes: Keir Starmer says Just Stop Oil’s demands are ‘contemptible’ – and he is right
The Daily Telegraph, 7 August 2023
It’s unlikely that a world without fossil fuels can sustain current levels of real income and population
“Contemptible.” That is how Sir Keir Starmer views Just Stop Oil’s message to turn off the taps in the North Sea – and he’s right.
A key JSO target is to eliminate all use of fossil fuels by 2030. There are two ways of interpreting this goal. The Augustinian interpretation (“Please make me virtuous, but not yet!”) would rule out direct use of fossil fuels in the UK but not the import and use of goods and services produced elsewhere using fossil fuels.
This is an extreme version of what has essentially been our strategy for the last 15 years, which is to outsource carbon emissions to China and other countries while pretending to be a world leader.
In contrast, the Fundamentalist interpretation would rule out any direct or indirect use of fossil fuels.
In effect, that would mean likely reverting to an isolated medieval economy with less than 10pc of the current population.
With current technologies, even a fully renewable energy system cannot operate without equipment and inputs produced using fossil fuels somewhere in the supply chain, such as coal in China.
Since few people or politicians will sign up to such an outcome, the Augustinian interpretation often seems a more moderate alternative. That is the flavour of the policies advocated by the Labour Party, despite Starmer’s recent intervention, and green groups.
Still, JSO’s goal is not accompanied by any concrete plans for implementation, other than vague assertions about alternative technologies.
Readers may be familiar with some of the well-publicised items – wind and solar farms, electric vehicles, and heat pumps – so I will focus on the rest of the economy, starting with transport.
Remember that the UK is a country which can’t build a small high-speed railway line in less than 20 years while spending two to three times the original cost. It has botched every major rail electrification project in the last 30 years.
To meet the JSO target we would have to electrify every mile of non-electrified railway in less than eight years or undergo a new Beeching closure programme.
To even contemplate the schedule, we would have to close all non-electrified routes temporarily for periods of two to five years.
Think, too, of the expenditure. All emergency programmes of this type tend to incur costs that are double or more what they might cost with a longer timeframe and better planning.
What about road transport? Viable electric HGVs are more a matter of hype than a practical proposition. Replacing more than 5.3m goods vehicles and buses in eight years, even if it were possible, could cost more than £500bn.
In practice, since the ranges of such vehicles are likely to be much lower than their diesel predecessors, the distribution system would have to be reorganised with much higher capital and operating costs.
Next, there is gas. Everyone focuses on home heating, but nearly 65pc of gas consumption occurs in commerce and industry.
Shutting down gas use will lead to the effective closure of most of the remaining manufacturing industry in the UK. It will impose large capital and operating costs on most commercial and service businesses as well as all public services.
The current idea of using hydrogen as an alternative is not feasible, especially over such a short timescale.
Even activities which are not significant users of gas will face the direct or indirect costs of insuring against the inherent intermittency of wind and solar power.
Of course, things might be different with massive investments in nuclear power, but again the UK can’t build a single large nuclear plant within a decade.
A final example is agriculture, fishing and forestry, one of the most oil-dependent sectors.
Two centuries ago, the UK was unable to produce sufficient agricultural and other products to meet the needs of a population of less than 15m.
Now, we have a population more than 4.5 times higher but without the direct and indirect use of fossil fuels we would revert to the technological level of the mid-nineteenth century.
In addition, many green activists want to replace agriculture with reforestation and rewilding, the reverse of what happened from the eighteenth to twentieth centuries. All of this is possible, but only with a large increase in food and other agricultural imports.
JSO’s Augustinian model for the UK is that of a country with a greatly reduced standard of living and population that is almost entirely dependent on material imports from places that are less concerned about using fossil fuels.
These would be paid for by a post-industrial or service economy. But even that does not work in practice.
How are food, materials and industrial products imported into an island with a single electrified link to the rest of the world? Sailing ships? Or a fleet of nuclear-powered cargo ships? The shipping industry relies almost entirely on fossil fuels and that is not going to change in eight years or even 18 years.
And without cheap air travel, how is the UK to deliver the services that are supposed to pay for the imports of material goods? Tourists need to travel as do the consumers or suppliers of cultural and educational exports.
Similarly for financial, professional, technical and other services. The UK is not Luxembourg – it has more than 100 times the population and is not within a short distance of some of the richest economic zones in the world.
JSO’s vision of the UK in 2030 is simply fantasy, less stimulating than Kipling’s Just So stories and not suitable for reading to either children or adults.
In truth, it seems very unlikely that a world without fossil fuels can sustain current levels of real income and population with foreseeable technologies, let alone meeting the expectations of developing countries. Contemptible indeed.
Professor Gordon Hughes is a retired Professor of Economics at the University of Edinburgh, and a former senior adviser on energy and environmental policy at the World Bank
7) John Hinderaker: EVs are on a collision course with reality
Powerline, 6 August 2023
The alleged transition to “green” energy is destined to crash and burn. EVs may turn out to be the green Waterloo.
A modern society can’t meet its needs for electricity with wind and solar sources that produce nothing a large majority of the time, supplemented by wholly notional “batteries.” The race to disaster is being accelerated by government-mandated use of electric vehicles, which will put impossible burdens on an already-inadequate grid. So it becomes a question of where the “green” dream will break down first.
EVs may turn out to be the green Waterloo. Numerous jurisdictions around the world have purported to ban gasoline-powered vehicles by some date in the not-far-off future, a dictate that cannot and will not be met. Rather than flying off dealers’ car lots, EVs are accumulating there in growing numbers. At Heartland, Ronald Stein explains some of the reasons why. Stein itemizes the numerous factors that cause buyers to be wary of EVs, and adds this:
"Another problem for the automobile industry is convincing the buyers that its ethical, moral, and socially responsible to buy an EV, especially since most of the exotic mineral and metal supplies to build the batteries are being mined in developing countries with limited environmental regulation nor labor regulations."
EVs are terrible for the environment, and their supply chains raise serious moral issues. But probably most consumers have more personal concerns:
"The problem is that manufacturers are loading up the “supply chain” with EV’s on dealer lots, but they’re not seeing the “demand” for EV’s coming from the public.
The current EV ownership profiles of the elite owners are that they are:
* highly educated.
* highly compensated.
* multi-car families.
* low mileage requirements for the families’ second car, i.e., the EV.
Current EV owners are dramatically different from most of the vehicle owners."
Something else that I hadn’t previously focused on is the used car market, which is vast:
"Historically, internal combustion engine (ICE) car sales in America are upwards of 55 million annually with about 15 million or 27 percent being new and 40 million or 73 percent being used car sales."
That is astonishing! 73% of auto sales are used cars. And yet:
"To date, the EV industry has virtually no used car market! In addition to the constant EV charging challenges, who wants a used EV that may soon need an expensive battery replacement?"
With about 73 percent of all car sales being that of used combustion engine cars, the lack of a resale market for EV’s may be a major problem for the auto industry."
Another thing that is different about EV drivers is that they largely–40% of them–live in California...
Full post
8) Tom Ryan: The UK’s Net Zero zealotry is harming the world’s poor
Spiked, 6 August 2023
A modern society can’t meet its needs for electricity with wind and solar sources that produce nothing a large majority of the time, supplemented by wholly notional “batteries.” The race to disaster is being accelerated by government-mandated use of electric vehicles, which will put impossible burdens on an already-inadequate grid. So it becomes a question of where the “green” dream will break down first.
EVs may turn out to be the green Waterloo. Numerous jurisdictions around the world have purported to ban gasoline-powered vehicles by some date in the not-far-off future, a dictate that cannot and will not be met. Rather than flying off dealers’ car lots, EVs are accumulating there in growing numbers. At Heartland, Ronald Stein explains some of the reasons why. Stein itemizes the numerous factors that cause buyers to be wary of EVs, and adds this:
"Another problem for the automobile industry is convincing the buyers that its ethical, moral, and socially responsible to buy an EV, especially since most of the exotic mineral and metal supplies to build the batteries are being mined in developing countries with limited environmental regulation nor labor regulations."
EVs are terrible for the environment, and their supply chains raise serious moral issues. But probably most consumers have more personal concerns:
"The problem is that manufacturers are loading up the “supply chain” with EV’s on dealer lots, but they’re not seeing the “demand” for EV’s coming from the public.
The current EV ownership profiles of the elite owners are that they are:
* highly educated.
* highly compensated.
* multi-car families.
* low mileage requirements for the families’ second car, i.e., the EV.
Current EV owners are dramatically different from most of the vehicle owners."
Something else that I hadn’t previously focused on is the used car market, which is vast:
"Historically, internal combustion engine (ICE) car sales in America are upwards of 55 million annually with about 15 million or 27 percent being new and 40 million or 73 percent being used car sales."
That is astonishing! 73% of auto sales are used cars. And yet:
"To date, the EV industry has virtually no used car market! In addition to the constant EV charging challenges, who wants a used EV that may soon need an expensive battery replacement?"
With about 73 percent of all car sales being that of used combustion engine cars, the lack of a resale market for EV’s may be a major problem for the auto industry."
Another thing that is different about EV drivers is that they largely–40% of them–live in California...
Full post
8) Tom Ryan: The UK’s Net Zero zealotry is harming the world’s poor
Spiked, 6 August 2023
So much of our foreign aid is being used to keep the developing world down.
UK prime minister Rishi Sunak’s softening on Net Zero will have had many breathing a sigh of relief. This week, Sunak confirmed that oil and gas would still be produced in Britain for the foreseeable future, issuing 100 new drilling licences in the North Sea. This is good news for the UK, but a shift in thinking on climate policy could have huge ramifications for the developing world, too.
Over the past week or so, the UK’s foreign-aid spending has come back into the spotlight. The Foreign Office has warned of disaster if aid spending is not restored to pre-pandemic levels. Similarly, last year, development minister Andrew Mitchell lamented that the UK was losing its status as a ‘development superpower’, thanks to cuts in foreign-aid spending. These warnings echo a commonly held view that more aid improves the lives of the global poor and boosts Britain’s standing in the world. In reality, in most of our dealings with the developing world, Britain has actually been holding other countries back. In recent years, we have used our aid budget and our presence on the world stage to strong-arm developing nations into adopting green policies that are likely to keep them poor.
For several years now, the UK government has promoted Net Zero at home and abroad with a fanaticism reminiscent of Just Stop Oil activists. At the Glasgow COP26 climate conference in 2021, then prime minister Boris Johnson was apocalyptic in his rhetoric, declaring that ‘it’s one minute to midnight on that doomsday clock and we need to act now’. He had the policies to match, too. In Glasgow, the UK led a group of 25 countries to commit to ‘ending international public support for the unabated fossil-fuel-energy sector’. This will make it far more difficult for developing countries to attract finance for new fossil-fuel-energy projects. It’s not hard to see how this will hinder development. No country has ever lifted itself out of poverty without fossil fuels.
Even when COP26 had wound down, the UK continued to bang the drum for Net Zero around the world. Conservative MP and COP26 president Alok Sharma spent 2022 lobbying governments in Indonesia, India and Vietnam to deliver or dramatically increase their Net Zero pledges. Following Sharma’s visit last February, the Vietnamese government enshrined its Net Zero commitment into law. This means Vietnamese farmers will be subject to strict emissions-cutting measures.
Vietnam will also have to swap coal-fired power generation for less reliable, renewable energy sources. These restrictions are only likely to hinder, rather than help, the Vietnamese economy. It is especially egregious for the UK to pressure Vietnam into adopting these punishing policies, given that the UK’s current GDP is more than seven times that of Vietnam’s.
Even the aid we send to the developing world is tainted with green caveats. In most years, more of our aid budget is spent via global quangos like the UN than on direct aid to foreign countries. These supranational bodies are also deep in the Net Zero mire.
António Guterres, secretary-general of the UN, argued in June that fossil fuels are ‘incompatible with human survival’. Meanwhile, the UN’s ‘Sustainable Development Goals’ promote the idea that growth should be contained within strict ecological limits. This means prioritising ‘access to green energy’ over powering factories and hospitals. The message is clear: poverty is better than polluting.
Full post
UK prime minister Rishi Sunak’s softening on Net Zero will have had many breathing a sigh of relief. This week, Sunak confirmed that oil and gas would still be produced in Britain for the foreseeable future, issuing 100 new drilling licences in the North Sea. This is good news for the UK, but a shift in thinking on climate policy could have huge ramifications for the developing world, too.
Over the past week or so, the UK’s foreign-aid spending has come back into the spotlight. The Foreign Office has warned of disaster if aid spending is not restored to pre-pandemic levels. Similarly, last year, development minister Andrew Mitchell lamented that the UK was losing its status as a ‘development superpower’, thanks to cuts in foreign-aid spending. These warnings echo a commonly held view that more aid improves the lives of the global poor and boosts Britain’s standing in the world. In reality, in most of our dealings with the developing world, Britain has actually been holding other countries back. In recent years, we have used our aid budget and our presence on the world stage to strong-arm developing nations into adopting green policies that are likely to keep them poor.
For several years now, the UK government has promoted Net Zero at home and abroad with a fanaticism reminiscent of Just Stop Oil activists. At the Glasgow COP26 climate conference in 2021, then prime minister Boris Johnson was apocalyptic in his rhetoric, declaring that ‘it’s one minute to midnight on that doomsday clock and we need to act now’. He had the policies to match, too. In Glasgow, the UK led a group of 25 countries to commit to ‘ending international public support for the unabated fossil-fuel-energy sector’. This will make it far more difficult for developing countries to attract finance for new fossil-fuel-energy projects. It’s not hard to see how this will hinder development. No country has ever lifted itself out of poverty without fossil fuels.
Even when COP26 had wound down, the UK continued to bang the drum for Net Zero around the world. Conservative MP and COP26 president Alok Sharma spent 2022 lobbying governments in Indonesia, India and Vietnam to deliver or dramatically increase their Net Zero pledges. Following Sharma’s visit last February, the Vietnamese government enshrined its Net Zero commitment into law. This means Vietnamese farmers will be subject to strict emissions-cutting measures.
Vietnam will also have to swap coal-fired power generation for less reliable, renewable energy sources. These restrictions are only likely to hinder, rather than help, the Vietnamese economy. It is especially egregious for the UK to pressure Vietnam into adopting these punishing policies, given that the UK’s current GDP is more than seven times that of Vietnam’s.
Even the aid we send to the developing world is tainted with green caveats. In most years, more of our aid budget is spent via global quangos like the UN than on direct aid to foreign countries. These supranational bodies are also deep in the Net Zero mire.
António Guterres, secretary-general of the UN, argued in June that fossil fuels are ‘incompatible with human survival’. Meanwhile, the UN’s ‘Sustainable Development Goals’ promote the idea that growth should be contained within strict ecological limits. This means prioritising ‘access to green energy’ over powering factories and hospitals. The message is clear: poverty is better than polluting.
Full post
9) Net Zero flop: Orkney’s Sea Snake wave energy generator to be scrapped
The Times, 5 August 2023
The Times, 5 August 2023
The first offshore wave machine to generate electricity into the UK grid, which was deployed off Orkney, is to be sent to the scrapyard.
The Pelamis Wave, known as the Sea Snake, was installed at the European Marine Energy Centre in 2004. At the time ministers hailed the installation as a “vital milestone” in Scotland’s drive to become a world leader in harnessing sea power for renewable energy.
The semi-submerged machine, which originally included five connected red tubes, was expected to generate 3MW of electricity, enough to power about 2,000 homes, by converting the movement of the waves into energy.
But the company went into administration in 2014 and the device was bought by Orkney Islands council for £1 three years later. It was originally valued at £2 million. After failing to find a use for it, the council will spend £150,000 to send the 1,350-tonne machine for scrap.
James Stockan, the council leader, said at the time of the purchase the device was “symbolic of the industry” and that if it was junked “the critics would have said, ‘you should have kept that for something’”.
Last month Gareth Waterson, the council’s director of enterprise, said it had spent £45,000 maintaining the machine. “It has been a bit of an albatross,” he admitted.
Full story
The Pelamis Wave, known as the Sea Snake, was installed at the European Marine Energy Centre in 2004. At the time ministers hailed the installation as a “vital milestone” in Scotland’s drive to become a world leader in harnessing sea power for renewable energy.
The semi-submerged machine, which originally included five connected red tubes, was expected to generate 3MW of electricity, enough to power about 2,000 homes, by converting the movement of the waves into energy.
But the company went into administration in 2014 and the device was bought by Orkney Islands council for £1 three years later. It was originally valued at £2 million. After failing to find a use for it, the council will spend £150,000 to send the 1,350-tonne machine for scrap.
James Stockan, the council leader, said at the time of the purchase the device was “symbolic of the industry” and that if it was junked “the critics would have said, ‘you should have kept that for something’”.
Last month Gareth Waterson, the council’s director of enterprise, said it had spent £45,000 maintaining the machine. “It has been a bit of an albatross,” he admitted.
Full story
10) Reminder: Net Zero policy already costing at least £2000 per household
Net Zero Watch, July 2022
Net Zero Watch, July 2022
An analysis by Net Zero Watch reveals that Net Zero policies are already costing every household over £2000 per year.
Spending programmes and the Emissions Trading Scheme together cost around £300, while green levies – mostly subsidies to renewables – are adding another £350.
Renewable energy also imposes a range of indirect costs as businesses pass on their costs to consumers, which may add up to another £600. Finally, there is a significant cost due to the constraints put on fossil fuel extraction in the UK.
Together, these figures add up to more than £2000 per household, a figure that will rise sharply as Net Zero plans moves to more problematic sectors of the economy.
Full factsheet (pdf)
Spending programmes and the Emissions Trading Scheme together cost around £300, while green levies – mostly subsidies to renewables – are adding another £350.
Renewable energy also imposes a range of indirect costs as businesses pass on their costs to consumers, which may add up to another £600. Finally, there is a significant cost due to the constraints put on fossil fuel extraction in the UK.
Together, these figures add up to more than £2000 per household, a figure that will rise sharply as Net Zero plans moves to more problematic sectors of the economy.
Full factsheet (pdf)
The London-based Net Zero Watch is a campaign group set up to highlight and discuss the serious implications of expensive and poorly considered climate change policies. The Net Zero Watch newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.netzerowatch.com.
1 comment:
Costly blow for 'renewables', Net Zero 'debacle', wow, who would have thunk it!!
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