Germany’s Green Energy Fiasco

GWPF | 29 April 2016

Wind Farms Paid €500 Million A Year To Stand Idle

Because of the boom of renewable energy, more and more wind turbines have to be switched off. The reason is power overloading. The network operators must turn down electricity generated from windmills when their power threatens to clog the network. For the grid operator Tennet alone, these costs added 329 million euros in 2015 – two and a half times as much as in the previous year. The other network operators 50Hertz, Amprion and EnBW had a combined cost of 150 million euros, according to a survey of Wirtschaftswoche among the four network operators in Germany. –Christian Schlesiger, Wirtschaftswoche, 28 April 2016

1) Germany’s Green Energy Fiasco: Wind Farms Paid €500 Million A Year To Stand Idle
Wirtschaftswoche, 28 April 2016

2) “Electricity In Germany More Expensive Than Ever”
No Tricks Zone, 29 April 2016

3) ‘We Are Staring At Disaster’ – Tata Steel Boss Hits Out At UK’s Energy Costs
Daily Express, 28 April 2016

4) It’s George Osborne Who Is Killing British Steel, Claims Tata Boss
The Sun, 29 April 2016

5) Lord Turner’s Misleading Views On The Paris Agreement
Global Warming Policy Forum 28 April 2016

The online German national daily Die Welt has a piece by business journalist Holger Zschäpitz on Germany’s sky-high, ever climbing electricity prices. Awhile ago it looked as if prices had finally stabilized. But now Zschäpitz writes that German electricity prices, already among the highest in the world, have jumped once again. Families today are paying 21% more for electricity than they did 5 years ago. So what is driving the rapid upward price spiral? Zschäpitz reports that it’s due mostly to the “Energiewende”. In the meantime, Germany’s CO2 emissions have been rising, and thus consumers are not really getting anything for the massive amounts of money. –Pierre Gosselin, No Tricks Zone, 29 April 2016

The boss of struggling steel giant Tata has blamed soaring energy costs and high business rates for crippling British industry. Tata chief executive Bimlendra Jha, whose UK operations are losing around £1million a week, said the firm’s energy charges are £40million more a year than those in Germany. His comments came as discussions continue over the future of the company’s plant in Port Talbot, South Wales, with thousands of jobs at risk. Mr Jha told members of the Business Select Committee today that high prices and a strong pound were hitting trade. –David Maddox, Daily Express, 28 April 2016

George Osborne risks killing off British manufacturing with sky-high green taxes and business rates – the Indian boss of the Port Talbot steelworks blasted today.  Tata Steel chief Bimlendra Jha said his UK business would be MAKING money if it had Germany’s electricity prices. And he told MPs that the Government’s existing policies – such as eco taxes which send energy costs through the roof – meant it was almost impossible for firms “bleeding money” to recover. He stormed: “We cannot be the ones who shut the door on the industrial revolution which began in this country.” —The Sun, 29 April 2016

The Paris Agreement not merely fails to ground the policy of mitigation of global warming, it ensures that the policy will fail. And the INDCs of China and India, which Lord Turner especially mentioned, are statements of an intention massively to increase emissions. The Paris Agreement provides an explicitly legal permission for developing countries not to make any CO2 reductions and will be the legal basis of continued immense increase in China’s and India’s CO2 emissions. China’s extremely ambitious and apparently positive intensity targets actually represent a statement that the increase in its emissions will be vast. Everything Lord Turner said about the Paris Agreement and China’s Intended Nationally Determined Contributions was wrong. That a person of his influence says things that will mislead the listening public is regrettable. That the BBC airs such statements without any challenges is a disgrace. –Professor David Campbell, Global Warming Policy Forum 28 April 2016

1) Germany’s Green Energy Fiasco: Wind Farms Paid €500 Million A Year To Stand Idle
Wirtschaftswoche, 28 April 2016

Christian Schlesiger

Because the German power grid is overloaded, more and more wind farms have to be switched off or slowed down. This costs network operators hundreds of millions of euros.

Because of the boom of renewable energy, more and more wind turbines have to be switched off. The reason is power overloading. The network operators must turn down electricity generated from windmills when their power threatens to clog the network. Originally, this was intended only as an emergency measure. The operators of wind and solar parks, however, are being subsidised for electricity that is not produced.

For the grid operator Tennet alone, these costs added EUR 329 million in 2015 – two and a half times as much as in the previous year. The other network operators 50Hertz, Amprion and EnBW had a combined cost of 150 million euros, according to a survey of Wirtschaftswoche among the four network operators in Germany.

Full story

Translation GWPF

2) “Electricity In Germany More Expensive Than Ever”
No Tricks Zone, 29 April 2016

Pierre Gosselin

The online German national daily Die Welt has a piece by business journalist Holger Zschäpitz on Germany’s sky-high, ever climbing electricity prices.


Awhile ago it looked as if prices had finally stabilized. But now Zschäpitz writes that German electricity prices, already among the highest in the world, have jumped once again…

According to a recent analysis, writes Zschäpitz, “Consumers are now paying more for their power than ever before” — some 30.27 euro cents per kilowatt hour. Families today are paying 21% more for electricity than they did 5 years ago.
So what is driving the rapid upward price spiral?

Zschäpitz reports that it’s due mostly to the “Energiewende” – Germany’s push away from nuclear and fossil generated power to renewables such as wind, solar and biogas…

In the meantime, Germany’s CO2 emissions have been rising, and thus consumers are not really getting anything for the massive amounts of money.

To illustrate the distortion gripping the German power market, Zschäpitz tells readers that today only 27% of the power price is made up of “pure raw material costs”. The electricity production cost by itself has in fact “fallen by 25% over the past few years“. However this cost reduction has been offset and more by other feed-in and grid operating surcharges levied as a result of the Energiewende

Full post

3) ‘We Are Staring At Disaster’ – Tata Steel Boss Hits Out At UK’s Energy Costs
Daily Express, 28 April 2016

David Maddox

The boss of struggling steel giant Tata has blamed soaring energy costs and high business rates for crippling British industry.

Bimlendra Jha leaving the meeting today
Tata Steel chief executive Bimlendra Jha appeared before the Business Select Committee today

Tata chief executive Bimlendra Jha, whose UK operations are losing around £1million a week, said the firm’s energy charges are £40million more a year than those in Germany.

His comments came as discussions continue over the future of the company’s plant in Port Talbot, South Wales, with thousands of jobs at risk.

Mr Jha told members of the Business Select Committee today that high prices and a strong pound were hitting trade.

He said: “When you get headwinds such as a stronger currency, you only have to go over the Channel to buy products in an open market.”

Mr Jha said if the pension fund liability at Tata is not taken care of there would be no buyer for the business, adding: “If we don’t solve it we are staring at some very bad consequences for the taxpayer. We are staring at a huge economic and social disaster.”

Full story

4) It’s George Osborne Who Is Killing British Steel, Claims Tata Boss
The Sun, 29 April 2016

George Osborne risks killing off British manufacturing with sky-high green taxes and business rates – the Indian boss of the Port Talbot steelworks blasted today.

George Osborne attending the Port Talbot Steel Works
George Osborne attending the Port Talbot Steel Works
Tata Steel chief Bimlendra Jha said his UK business would be MAKING money if it had Germany’s electricity prices.

And he told MPs that the Government’s existing policies – such as eco taxes which send energy costs through the roof – meant it was almost impossible for firms “bleeding money” to recover.

He stormed: “We cannot be the ones who shut the door on the industrial revolution which began in this country.”

The blast came as the Tata chief warned there were “serious question marks about the viability” of Port Talbot steelworks.

Full story

5) Lord Turner’s Misleading Views On The Paris Agreement
Global Warming Policy Forum 28 April 2016

Professor David Campbell

Everything Lord Turner said about the Paris Agreement and China’s and India’s Intended Nationally Determined Contributions was wrong.

On yesterday morning’s BBC Today Programme, Lord Adair Turner, the chairman of the UK’s Energy Transitions Commission (and formerly Chair of the Committee on Climate Change) gave his very positive views on climate change policy in light of the Paris Agreement (PA) which has been opened for signature on 22 April. These views went essentially unchallenged by an interviewer with a limited grasp of the issues, and as those views were fundamentally wrong, listeners will likely have been badly misled.

Lord Turner told listeners that the Paris Agreement and the statements of policy intention by the Parties to the Paris Conference – the ‘Intended Nationally Determined Contributions (INDCs) – were excellent but more needed to be done. But the Paris Agreement not merely fails to ground the policy of mitigation of global warming, it ensures that the policy will fail. And the INDCs of China and India, which Lord Turner especially mentioned, are statements of an intention massively to increase emissions. Three principal points should be made.

First, Lord Turner will have led listeners to believe that an agreement to set a limit to warming of 2°C or less has been reached. The main burden of what he said is that more needs to be done to meet this target than has so far been said in INDCs. But Art 2 of the Paris Agreement in fact provides only that it ‘aims to strengthen the global response to the threat of climate change … including by the holding the increase to well below 2°C’. This is an expression, not of setting a concrete limit, but merely of an aspiration to set such a limit. It is true that Art 2 is expressed in a deplorably equivocatory and convoluted language which fails to convey this vital point, indeed it obscures it. But nevertheless that is what Art 2 means.

What weight can be put on this aspiration? Neither 2°C nor any other specific target has ever been agreed at the UN climate change negotiations. To the best of my knowledge, the 2°Ctarget was itself devised by the EU Commission and first put forward at a meeting of the Council of the European Union in 1996 in order to push forward UN negotiations which even then were giving ‘concern’ because they were ‘not advancing as needed to achieve [their] intended objective’. Diplomacy in which the UK and the EU, in collaboration of the UN Climate Change Secretariat, have played a large part has since led to the 2C target being mentioned in various ways in subsequent UN negotiations. But it has never been actually agreed and it is not agreed now.  An expression of mere aspiration is all that has been reached after more than a quarter century of negotiations. To speak of the Paris Agreement so positively without mentioning this history of failure at all is bound to mislead.

But this is by no means the worst feature of the Paris Agreement. That’s because, secondly, it gives yet more force to what has undermined the mitigation policy since the agreement of the Framework Convention in 1992. An agreement was reached at the Convention (and the subsequent 1997 Kyoto Protocol), but, far from being an agreement to reduce global emissions, it was an agreement to allow their unbounded increase. Under the ‘common but differentiated responsibilities’ strategy without which the Convention would never have been agreed by the newly industrialising countries such as China and India, those countries, classified amongst the developing countries, are given explicit permission to give economic growth priority over emissions reduction. And as the emissions of China (itself in pursuit of its growth plans) have been, are and will be more than enough to make the 2°C target a sort of joke (with India following behind), this has implicitly meant that the mitigation policy was impossible from the outset. No emissions caps have ever been, are, or can be set on the developing countries, for the good reasons that this is what the Framework Convention, the Kyoto Protocol and now the Paris Agreement provide.

In the Paris Agreement, this disastrous position is actually strengthened by being made explicit. In discussions of climate change policy, a crucial distinction has been drawn between ‘absolute’ (i.e. actual emissions reductions) and other forms of reductions (principally in carbon intensity), which do not normally lead to absolute reductions but are, indeed, perfectly consistent with a significant growth in absolute emissions. Art 4(4) of the Paris Agreement confines ‘absolute emissions reduction targets’ to the developed countries and distinguishes them from the ‘mitigation efforts’ the developing countries might undertake, which will not involve absolute reductions. This provides an explicitly legal permission for developing countries not to make any CO2 reductions and will be the legal basis of continued immense increase in China’s and India’s CO2 emissions.

Thirdly, when it comes what China is prepared to commit to doing internationally, there is no need to quote from its INDC as its wording is very similar indeed to what has appeared in the Paris Agreement. It would appear that the Paris Conference largely adopted the Chinese wording in the Paris Agreement. China’s INDC is a categorical statement that anything it may choose to do will be subject to Art 4(7) of the Framework Convention, and that absolute emissions reductions are a matter exclusively for the developed countries in the way that appeared in Art 4(4) of the Paris Agreement. China will not be making any such reductions.

There is a statement of intention to ‘achieve peaking’ of emissions by 2030 or earlier, but it is very difficult to understand this. It cannot mean achieving a peak level of absolute emissions in 2030 as this would prevent further economic growth. It must be interpreted in terms of what China generally claims it intends to do, which is to lower carbon intensity. Lord Turner represented China’s position very positively, but it is very misleading.

Reduction in carbon intensity and reduction in absolute emissions must be strongly distinguished. Carbon intensity is a measure of the amount of CO2e which must be emitted to obtain a certain increase in GDP. Broadly speaking, absolute emissions and economic growth are strongly correlated, but, with increasing sophistication of technology, the rate at which growth requires emissions, that is to say, carbon intensity, falls. China’s economic growth will involve a reduction of carbon intensity as new power plants are installed and old plants are retired. But reduction in carbon intensity may be perfectly consistent with unbounded absolute growth in CO2 emissions, depending on how much economic growth there is.

China’s growth targets, stated as its ‘strategic goals’ in the INDC, are such that Chinese reductions in carbon intensity will be made, not despite but because of a growth in absolute emissions. China will not retire existing generating capacity and replace it only with an equivalent or smaller capacity generated by lower intensity plant. It will retire older capacity in the course of an immense expansion of overall capacity. China’s extremely ambitious and apparently positive intensity targets actually represent a statement that the increase in its emissions will be vast.
Everything Lord Turner said about the Paris Agreement and China’s Intended Nationally Determined Contributions was wrong. That a person of his influence says things that will mislead the listening public is regrettable. That the BBC airs such statements without any challenges is a disgrace.

Prof David Campbell is Professor of Law at Lancaster University Law School

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