Spain: War of the Renewables | 36 comments (36 topical, editorial, 0 hidden)

Re: Spain: War of the Renewables (4.00 / 2)

At a subsidy level of over ten times the cost of wind, RnD is going to be spent on not only technologies that are currently uneconomic, but also on technologies that do not have even a theoretical possibility of ever becoming economic.

Whoa. Are you now claiming that the difference between prototype phase and series mass-production of a developed technology cannot be 90%?... On what basis? I'm less pessimistic seeing this:

"build a prototype in a government lab in hope of finding ways to lower costs"

That sounds nice, but competition with a sizeable budget brings faster development, large-scale production brings down costs by economies of scale.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue Apr 27th, 2010 at 02:30:39 PM EST
[ Parent ]

Re: Spain: War of the Renewables (none / 0)

Which would make a system that subsidized the first x megawatt produced at certain rate, and then declined coherent policy, but the subsidies are unbounded, or bounded by year of production instead of number of installations built, and that creates strong incentives to build as fast as at all possible, and to hell with cost, because this nets you the highest subsidy, and total expediture on these subsidies are, quite simply, insane for the results they produce. I saw a blog post on this just recently... one sec.

http://uvdiv.blogspot.com/2010/04/how-much-subsidy-for-german-solar-power.html#comments

The financial commitment for 2009 alone is a minimum of 18 billion euros plus. An equivalent investment in nuclear capacity would allow the German government to build 6 EPRs, producing some 9 times the power and earning the government a profit Because it would own all six free and clear. This is, quite simply, mad.

by Thomas on Tue Apr 27th, 2010 at 03:55:02 PM EST
[ Parent ]

Re: Spain: War of the Renewables (none / 0)

The total committed expediture to date on German solar subsidies has a present cash value of 60 billion + euros. If spent on atomic power, that is 20 EPR's, or some 32 gigawatts of carbon free electricity capacity.
This would produce 262800 gigawatthours of electricity per year. Say. That is an interesting number. Where have I heard it before? Oh right, that is Germany's current production of electricty per annum from coal...

by Thomas on Tue Apr 27th, 2010 at 04:04:16 PM EST
[ Parent ]

Re: Spain: War of the Renewables (none / 0)

and note, that would still not be a subsidy. That would be a 60 billion euro investment. (Altough, selling power from that much nuclear capacity that had been paid for up front would probably do sickly amusing things to the electricity market, so return might not be so good..)

by Thomas on Tue Apr 27th, 2010 at 04:10:58 PM EST
[ Parent ]

Re: Spain: War of the Renewables (none / 0)

Which would make a system that subsidized the first x megawatt produced at certain rate, and then declined

How would that make sense? (And do you mean "first x megawatt-hour produced or what?) Unlike coal or nuclear, solar has almost only upfront costs (production and installation), so it stands to reason that you don't reduce the rate for already installed units. (Though inflation and cell degradation will reduce real annual income over those 20 years.)

The calculation in the blog post you link is funny: it doesn't even attempt to substract a market price from the feed-in rate, declaring all of it a "subsidy" (which, then again, is standard practice in propaganda from the German energy giants). (It would not be an easy calculation: you'd need to project future inflation, cell degradation, consider the diurnal and seasonal change of both PV output and market prices; and correct for grid use, which is zero for own consumption.) Whether even the thus the overestimated sum from that blog post is equivalent to building 6 EPRs, was already questioned by Jérôme; let me add operating, fuel and dismantling costs.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Apr 29th, 2010 at 06:01:10 AM EST
[ Parent ]

Re: Spain: War of the Renewables (none / 0)

sigh The issue is that paying ten times as much for one kind of green electricity as for another is mad. The entire point of any intervention in the electricity market is to reduce carbon emmissions and other pollutants yes?
There is a finite amount of capital/will/industrial capacity available to do this job. In Germany, it appears to have been admirably high, but when that enormous sum of money and good will gets wasted buying insanely overpriced solar power, very little CO2 gets displaced. I used nuclear as an example because it has low kwh costs, and that puts the issue in sharp contrast, but the basic problem is that the an extremely large amount of money has been spent and future commitments agreed to for depressingly weak results. That does not aid the future cause of green power in any way, shape or form.

It would be far more reasonable policy to tax coal at a rising rate until it goes away, as that would get actual zero-carbon capacity built in the order of "cheapest first", rather than "goldplated alter of Ra"

by Thomas on Thu Apr 29th, 2010 at 06:39:08 AM EST
[ Parent ]

Sigh (4.00 / 3)

OK, why not continue with the re-education.

Arrhenius Institute last week released a very important study of future PV effect in Germany. From the english exec sum:

The present study fills this gap. In a first part, it is qualitatively shown how the power price and the equilibrium quantity on the power exchange change with increasing PV capacities. These findings can directly be translated into shrinking revenues for operators of conventional power plants. In the second part, a quantitative analysis of the German power market is provided. Based on a fundamental model analysing 8,760 hours per year with real plant data the impact of six scenarios for the build-up of PV capacities ranging from an immediate stop of new PV installations to an additional 50 GW of PV until 2020 are studied. The effects of different PV scenarios on the whole sale power price and the total revenues (i.e., price multiplied by quantity) of all conventional power plants are calculated. For an in- cumbent operator of a coal-fired power plant, the contribution margin may decrease by more than 25% and for a new, yet to build gas-fired combined cycle power plant it may drop by more the 30%. One reason for this massive impact is the fact that PV installations produce power around noon when load and, thus, power prices as well as revenues are usually the highest in Germany. In this respect PV differs considerably from other renewable energies.

Not to mention that building an export PV industry in grey Germany has a few positive externalities. Like already done with wind. Imagine what Spain could do, if, as this study shows, the main stakeholders of conventional power are getting their butt's kicked. (methinks that's what losing "contributions" means. revenue.)

PS. when i first came across the study last week, i was surprised to see J's merit effect mentioned. Why i can't find the reference now is to my disgrace.

Arrhenius study here

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Tue Apr 27th, 2010 at 05:32:28 PM EST
[ Parent ]

Re: Sigh (none / 0)

Let me put this as bluntly as at all possible. The german solar subsidy program 2004-2009 entailed was a total financial commitment from the German state of 60. Billion. Euros. in present value. What the germans got for that money was an installed capacity of 1.3% of their total electricity production.
An equivalently sized investment (Not subsidy. Investment!) in nuclear capacity would have meant that every coal plant in Germany would either already have been demolished, or be scheduled for the teams with the dynamite within at most 3 years.
Not made less profitable at the margin on some future date. Already blown the fuck up due to being utterly worthless.
If the German example leads other people to copy that type and scale of subsidy? That counts as a negative externality.

by Thomas on Wed Apr 28th, 2010 at 01:27:52 AM EST
[ Parent ]

You're wrong (4.00 / 2)

the German State did not put a single cent. The feed-in tariff is borne by rate payers, not by taxpayers.
as I've written in various other places, the merit order effect of the wind injected in the system was sufficiently large to ensure that the net effect on rate payers is actually to bring prices down

oh, and beyond that:

can we agree that €3bn/EPR is not a realistic figure today? Can we also agree that no nukes can be built under today's market based system? And that if you start changing rules for nukes, then you can't criticize wind using these rules?
the 25GW of installed wind now provide 50TWh of essentially free electricity every year - counting solar, we're getting close to 10% of yearly needs of Germany.
did you count how many billion euros of solid wind and solar technology exports are not made possible by these early subsidies?

Wind power

by Jerome a Paris (etg@eurotrib.com) on Wed Apr 28th, 2010 at 02:33:41 AM EST
[ Parent ]

Re: You're wrong (none / 0)

Wind-feed-in and solar-feed-in are diffrent in kind due to a diffrence in degree.
Each KHW of wind is warranted a minimum price of some 8 cents, and because it gets dispatched first, it mostly displaces (very expensive) gas, which means that the real subsidy is fairly theoretical. Solar is guaranteed a minimum price vastly higher than any other energy source, including all other green energies. Merit order or no, that means the extra costs are in no way theoretical, and let us, just for a second turn the merit order logic on its head. Nuclear inherently comes at the top of any rationally managed capacity dispatch order, so an investment of this size in additional capacity would crash electricity prices far and hard, no?

3 billion/epr is fairly reasonable for an average cost of a 20 reactor buildout in Germany. Germany has historically had lower nuclear construction costs than the rest of the western world, and 20 is enough to get major savings from series build

by Thomas on Wed Apr 28th, 2010 at 04:33:39 AM EST
[ Parent ]

ok (none / 0)

I agree that today, feed-in tariffs for wind and solar are different in nature.

The trick is to give support to the early projects and make it possible for costs to tumble down before the absolute cost of the support mechanism becomes too heavy a burden on the system. For wind, this happened rather successfully; for solar, it seems to be more difficult.

It can still be argued that it can be good long term industrial policy, but we are at the most difficult junction right now - already some scale, and still high costs.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Wed Apr 28th, 2010 at 01:05:18 PM EST
[ Parent ]

Re: Sigh (4.00 / 2)

Let me put this as bluntly as at all possible.

Fact checking will help.

I would also recommend avoiding blunt contact with those employed in Germany's negative externality, as they tend to be as proud of their export success around the globe as the Danes. What portion of Danish GDP comes from wind? (Hint: one fourth of all Danish export credits go to wind) In addition to lowered electricity prices, isn't that a positive externality?

As comments here have stated, Germany is quickly growing a vibrant solar manufacturing industry to export. Mirroring wind.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Wed Apr 28th, 2010 at 03:52:20 AM EST
[ Parent ]

Re: Sigh (none / 0)

Indeed half of all PV cells produced in Germany in 2008 went for export.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Apr 29th, 2010 at 06:27:48 AM EST
[ Parent ]

Spain: War of the Renewables | 36 comments (36 topical, 0 editorial, 0 hidden)

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