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« Carbon debrief has its pants down | Main | January hurricanes »
Monday
Jan182016

Renewables slump on the way

The Independent is reporting research that suggests that investment in renewable energy is about to slump dramatically. The research comes from BNEF, so the usual caveats about reliability apply.

The dour forecast comes as the industry celebrated a record-breaking year in 2015, with billions of pounds poured into solar and wind energy and more homes powered by nature than ever before. But experts have warned this is all about to grind to a halt as the Government abandons its commitment to green energy and instead invests in fracking and nuclear power.

And of course this is all happening just as renewables become cost competitive with fossil fuels.

Dr Doug Parr, chief scientist and policy director at Greenpeace UK, said: “Wind and solar energy are at the point of becoming really competitive with fossil fuels, but failure to support them for another few years will result in huge losses of potential jobs.”

If this is true then it's good news for everyone other than the subsidy junkies. But we will have to wait and see.

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Reader Comments (46)

Love that photo - even more dramatic than the Angel of the North !

Jan 18, 2016 at 9:35 AM | Unregistered Commentertoad

Even Jonathan Leake, The Sunday Times Environmental Correspondent, noticed that an anticyclone over the British Isles, resulting in light winds, causes wind power output to drop dramatically....

Who'd have thought it..?

Jan 18, 2016 at 9:40 AM | Unregistered Commentersherlock1

The Independent, as usual, has it totally wrong and is totally biased with the so-called experts it relies on.

The Government does not invest in fracking and nuclear power. Full stop.

We have said for years that if you take away the subsidies, almost all renewable energy developments would disappear as they are not economically sustainable (to use the planning definition of sustainable development). Renewable energy developments have been permitted counter to the requirements of the National Planning Policy Framework, which requires them to be economically sustainable.

There are a couple of good comments at the Independent. Unlike the Grauniad, do they allow sensible comments?

Toad: That photo looks like a Health and Safety issue. That yellow warning sign is totally inadequate.

Jan 18, 2016 at 9:44 AM | Registered CommenterPhillip Bratby

Do they have a computer model that shows that Unreliables are going to be really competitive with fossil fuels within a couple of years? There seems to be no other reason for this statement to be made.

I am sure that this unsustainable claim has been endlessly recycled and repeated many times already, and it actually seems to get less credible every time.

Jan 18, 2016 at 9:47 AM | Unregistered Commentergolf charlie

https://www.yell.com/s/scrap+metal+merchants-london.html

Jan 18, 2016 at 9:47 AM | Unregistered CommenterH Steptoe

> The Government does not invest in fracking and nuclear power. Full stop.

That's only if you don’t consider allowing them to keep a fraction of their profits as a subsidy.

Jan 18, 2016 at 9:51 AM | Unregistered CommenterTerryS

'....about to become competitive with fossil fuels....'

Would that be with oil at $115/barrel - or - $25/barrel...?

Jan 18, 2016 at 9:51 AM | Unregistered Commentersherlock1

>>Would that be with oil at $115/barrel - or - $25/barrel...?

Well, if you include the cost of having to quadruple the installed capacity figure, plus the cost of the backup fossil fuel supply, more like $500 a barrel.

R

Jan 18, 2016 at 9:59 AM | Unregistered Commenterralph Ellis

Cue for Windy Miller's song.

Jan 18, 2016 at 10:01 AM | Unregistered CommenterNCC 1701E

Dr Doug Parr is mistaken. BigOil cannot stop the sun from shining or the wind from blowing. Panels and windmills will continue operating with identical efficiency as they have so far.

Jan 18, 2016 at 10:02 AM | Unregistered CommenterAila

If wind and solar are about to become competitive with fossil fuels, why doesn't Greenpeace raise the money itself to invest? If Greenpeace is correct, the investment should provide a substantial return. It's not as if Greenpeace hasn't speculated in markets before.
Put your money where your mouth is, Greenpeace!

Jan 18, 2016 at 10:03 AM | Unregistered Commenterrotationalfinestructure

TerryS

"That's only if you don’t consider allowing them to keep a fraction of their profits as a subsidy."

All industry and commerce and self-employed folk are allowed to offset certain specified costs against profit. Even myself, a landlord, can offset my investment in my property plus running costs against tax. The fossil fuel industry is being treated no differently to anyone else in terms of tax deductions. On the other hand, when the oil price is high, the North Sea oil industry has been hit with a SUPER tax on their profits in addition to normal Corporation tax. Without the oil industry tax take and the VAT and Excise Duty levied on Petroleum, the UK Exchequer would be in a pickle. In fact, the fall in the oil price has already decimated the tax take from North Sea Oil. Poor old UK Exchequer! Poor old SNP!

Jan 18, 2016 at 10:05 AM | Unregistered Commentermarchesarosa

Expect the Guardian to be running ' Peak Wind' stories, and a 'Keep it in the Air ' campaign.

Jan 18, 2016 at 10:08 AM | Unregistered Commentergolf charlie

The future is glowing, the future is nookular.


Renewables will be useful in remote areas like Alex Salmond's head. Not for powering major economies as we understand round these parts.

Jan 18, 2016 at 10:09 AM | Unregistered Commenteresmiff

Aila: "Panels and windmills will continue operating with identical efficiency as they have so far."

Wrong. Their performance falls off rapidly as they degrade with age.

Jan 18, 2016 at 10:11 AM | Registered CommenterPhillip Bratby

Isn't it a feature of fraudsters where they continually promise that with just a bit more investment the money will start rolling in?

Jan 18, 2016 at 10:15 AM | Unregistered CommenterTinyCO2

Subsidies were just like lots of free, blue pills.

The picture illustrate just one of many inadequate erections.

Jan 18, 2016 at 10:26 AM | Unregistered CommenterBernd Felsche

Will this will be the subject of a new Hollywood Film; the Unsustainables?

Jan 18, 2016 at 10:34 AM | Unregistered CommenterNCC 1701E

Toad: Looks more like the Angle of the North to me. But gone West.

Aila: "Panels and windmills will continue operating with identical efficiency as they have so far." - and that efficiency is what, on average?

Jan 18, 2016 at 10:46 AM | Unregistered CommenterHarry Passfield

Gone with the the Heavy Wind

Jan 18, 2016 at 10:47 AM | Unregistered CommenterH Steptoe

Aila: "Panels and windmills will continue operating with identical efficiency as they have so far."

Wrong. Their performance falls off rapidly as they degrade with age.

In other words, Philip, Aila has it about right.

Jan 18, 2016 at 10:50 AM | Registered CommenterRadical Rodent

Dr Doug Parr, chief scientist and policy director at Greenpeace UK, said: “Wind and solar energy are at the point of becoming really competitive with fossil fuels, but failure to support them for another few years will result in huge losses of potential jobs.”

Clearly, those working in the industry haven't extracted a sufficient amount of taxpayers' dosh for their back-pockets!

Jan 18, 2016 at 10:51 AM | Unregistered CommenterAlan the Brit

Wind and solar energy are at the point of becoming really competitive with fossil fuels
It's that word 'really' that gives the game away. Sets alarm bells ringing in my head every time I see it!
If wind is 'really' on the point of becoming competitive then Parr would not say it is becoming 'really' competitive. Use of language is often the giveaway.

Jan 18, 2016 at 11:05 AM | Registered CommenterMike Jackson

"....but failure to support them for another few years will result in huge losses of potential jobs.”

Whose jobs?

Jan 18, 2016 at 11:31 AM | Unregistered Commentermaltesertoo

I love that photo of the reshaped wind-turbine. It shows how disused wind-turbines could be adapted into decorative archways to celebrate the end of Global Warming/CAGW/Climate Change.

Jan 18, 2016 at 11:40 AM | Unregistered Commenternicholas tesdorf

If solar and wind power were not competitive with oil when oil was priced at $120 a barrel, how come they are competitive now when the price of oil has crashed down to $30?

Have wind and solar radiation become cheaper at source?

Jan 18, 2016 at 11:42 AM | Unregistered Commentermaltesertoo

Does the UK still have the ability to recycle failed wind turbines into useful products, or do their useless carcasses have to be shipped halfway round the world to be melted down?

Jan 18, 2016 at 11:46 AM | Unregistered Commentergolf charlie

Mike Jackson says "Use of language is often the giveaway."

Indeed it is. Elsewhere the article says "...with billions of pounds poured into solar and wind energy and more homes powered by nature than ever before..."

We live in a world where marketing and hype override the accurate use of language, According to my Concise OED "nature" means "the phenomena of the physical world collectively, including plants and animals, and the landscape, as opposed to humans and human creations". With that reference to the physical WORLD, it arguably (but only arguably) excludes the sun and solar power but definitely includes oil and coal and arguably nuclear power.

These days words mean whatever people want them to mean, so long as the message is "right on".

Jan 18, 2016 at 11:46 AM | Unregistered CommenterMark Hodgson

Re cost of crude oil, according to something on a news programme this morning, not sure if it was BBC or BFMTV, Iran is planning to triple its oil production. This, it was claimed, will push the price down to levels not seen for many decades. From that I took it that the suggestion was that the price would go below $20 per barrel and nearly to 1973 levels. The sub-30$ per barrel of today takes the cost below 1979 levels in dollars without taking inflation into account. That must add a few years to but failure to support them for another few years so that should be but failure to support them for another few decades

Jan 18, 2016 at 11:59 AM | Unregistered CommenterSandyS

maltesertoo 11:42, Green Blob Economics is so complicated that even the Guardian's experts would struggle to answer a simple question like that. It involves complex numbers, (some are frightfully big) multiplied by off-centred negative square root analysis, and when that fails, you just make it up to match the predetermined conclusion anyway.

Jan 18, 2016 at 12:07 PM | Unregistered Commentergolf charlie

"powered by nature" FFS! Groan!

Jan 18, 2016 at 12:26 PM | Unregistered Commenterturningtide

SandyS, the ban on alcohol in the USA, Prohibition, did not reduce demand, but created a perfect environment for illegal trade, which gave it a wealthy and glamorous image.

Fanatical Muslim groups have been thriving on sanction busting oil sales, which OPEC has not been able to 'fix'. Iran is desperate for legal income to buy goods from abroad, and will want to sell as much oil as possible, through legitimate channels. The profits from sanction busting oil sales from Iran, and elsewhere may drop, but it does seem likely that normal price fixing by reducing supply will not be restored for a while yet. Until then, OPEC remains powerless.

Islamic extremist groups are not going to go bust overnight, but they may have to redefine their business models for expansion. Just like the Mafia did after prohibition.

Jan 18, 2016 at 12:43 PM | Unregistered Commentergolf charlie

When I bought a new oil-fired boiler a few years ago I thought I'd made a big mistake. Just as well I didn't listen to any 'experts'.

Jan 18, 2016 at 1:18 PM | Unregistered CommenterJamesG

Re: marchesarosa

> The fossil fuel industry is being treated no differently to anyone else in terms of tax deductions.

Yes it is. Your business offset losses against profits. The oil industry can not do that. They pay what is known as Ring Fence Corporation Tax which HMRC define as:

This is calculated in the same way as the standard corporation tax applicable to all companies but with the addition of a “ring fence” and the availability of 100% first year allowances for virtually all capital expenditure. The ring fence prevents taxable profits from oil and gas extraction in the UK and UKCS being reduced by losses from other activities or by excessive interest payments. The current main rate of tax on ring fence profits, which is set separately from the rate of mainstream corporation tax, is 30%

In addition they pay Petroleum Revenue Tax (35%) which is a ring fenced tax on individual oil fields. This means that if you have 2 adjacent oil fields and one makes £1m and the other loses £1m you pay 35% on the profitable one.

On top of all this they have a 20% surcharge tax which is based on profits WITHOUT financial deductions.

Overall the tax rate on Oil and Gas can be as high as 85% of profits.

Oil and Gas have completely different tax regimes to other companies.

Jan 18, 2016 at 2:09 PM | Unregistered CommenterTerryS

'The Independent is reporting research that suggests that investment in renewable energy is about to slump dramatically. The research comes from BNEF, so the usual caveats about reliability apply.'

http://money.cnn.com/2016/01/18/investing/oil-crash-wall-street-banks-jpmorgan/index.html

Investment in oil is about to slump as well.

Jan 18, 2016 at 3:16 PM | Unregistered CommenterGamecock

The fall in oil price may be bad for the oil industry but it is good for everyone else on the planet and hence should boost jobs overall and maybe overall tax-take too. It also makes these diesel Stors that provide backup for renewables less costly. Hence wind energy providers will be able to avoid any new intermittency charge just by running diesel sets - and that's only if the money they get from switching the wind generators off when not required doesn't cover them enough already.

Jan 18, 2016 at 3:26 PM | Unregistered CommenterJamesG

I've never understood the argument that "subsidy helps companies to become competitive". But seemingly intelligent people buy the line, I just don't understand it.

Jan 18, 2016 at 3:28 PM | Unregistered CommenterJohn Galt

"Sustainable energy" suddenly becomes unsustainable if you pull the subsidies? Who would have thought it?

Jan 18, 2016 at 3:45 PM | Unregistered CommenterCraig Loehle

JamesG, more importantly, why bother repairing windturbines, if a diesel generator is more profitable, and reliable too?

It will be far cheaper and more profitable to build useless wind turbines with no actual mechanism inside, other than a diesel generator, and then their true cosmetic value can be appreciated, or not.

It is hardly as though the Green Blob are immune from fraud and corruption, especially with EU supervision.

I wonder if the minimum amount of energy generated by wind will start to creep upwards in calm conditions? Spanish solar did quite well financially out of nocturnal activity, lunar power for lunatic subsidies. What next, Fresh Air, powered by diesel?

Jan 18, 2016 at 3:48 PM | Unregistered Commentergolf charlie

Special pleading 101.

Jan 18, 2016 at 4:14 PM | Unregistered CommenterAndrew Duffin

How can you lose a "potential" job? ;-)

Jan 18, 2016 at 5:57 PM | Unregistered CommenterDavid Johnson

Guido Fawkes also runs with this story. The UK population do not seem upset or bothered about reducing subsidies to the wealthy, which have to be paid by those who can least afford it. All this money is not saving the planet I am on.

Jan 18, 2016 at 6:25 PM | Unregistered Commentergolf charlie

Read again.

Jan 19, 2016 at 12:59 AM | Unregistered CommenterAila

@ golf charlie,
You pointed out:
"It will be far cheaper and more profitable to build useless wind turbines with no actual mechanism inside, other than a diesel generator, and then their true cosmetic value can be appreciated, or not."
+10

Jan 19, 2016 at 4:40 AM | Unregistered Commenterhunter

@ Golf Charlie

A siimpler option: :-)
https://obviousinvention.wordpress.com/2012/01/22/redeployment-of-wind-powered-generators/

Jan 19, 2016 at 7:06 AM | Unregistered CommenterBernd Felsche

Dr Doug Parr, chief scientist and policy director at Greenpeace UK, said: “Wind and solar energy .... but failure to support them for another few years will result in huge losses of potential jobs.”

A more accurate statement would be "Wind and solar energy .... but failure to support them for another few years will result in huge savings on extra costs for the consumer".


The Solar Foundation released its annual Solar Jobs Census Tuesday 12 Jan 2015, and found that for the third straight year, the solar workforce grew 20 percent in the United States. According to the census, the industry added 35,052 jobs, elevating its grand total to 208,859. That builds on the 31,000 jobs added the year before, and 23,600 added the year before that.
“It’s incredible,” SolarCity CEO and co-founder Lyndon Rive told ThinkProgress. “The industry employs over 200 thousand people — more than the coal industry.

Major energy sources and percent share of total U.S. electricity generation in 2014:

Coal = 39%
Solar = 0.4%
Wind = 4.4%

200,000 odd jobs, 200,000 odd costs, produce, depending upon the technology, either 39% of our electricity or 0.4% of our electricity. At which point we can see what the actual expense of solar is.

Jobs really are a cost.

Start with it from the point of view of the individual: neither I nor you particularly want a job. We most certainly aren’t all that fond of having to do the work that a job entails. We absolutely love being able to consume things, of course. And we all view having an income as most useful in being able to purchase the things we want to consume. But we all also view the job, the work we have to do, as a cost of getting that income so that we can consume stuff. The job is the cost, the consumption the benefit here.

Now look at it from the point of view of whoever is doing the employing of that labour. They certainly look upon a job as being a cost: they’ve got to pay out the wages to get people to do it after all. The benefit is that they get that work done so that they can go sell the goods or services produced. But the job itself, that’s still a cost to them. We even record the wages they pay on the cost ledger side of their accounting books, not on the benefits or income side.

Finally, think of it from the point of view of the whole society. Think about labour as being a scarce resource. Which it is of course: and just as with any scarce resource we want to use it as efficiently as possible. Say, imagine, we have 100 workers and all 100 were working on the farms to produce the food that kept all 100 people alive. Now we bring in new technology to farm with and we only need two people working to feed all. Well, we could say that 98 of the people are losing their jobs and that’s a disaster. But hold on a moment, jobs are a cost. Jobs here are a cost of producing food and we’ve just saved 98 job’s worth of cost. What this actually does is frees up those 98 people to go and do other things. Like, ooh, build libraries, hospitals, start manufacturing industry, join the military and so on. Roughly speaking this is also what has happened to the North Atlantic economies over the past four hundred years or so. We’ve moved from having nearly everyone working the land to about 2% of us doing so. And that has freed the labour up to go and build all the other things that we now generally refer to as civilisation.

In this final case the cost of those 98 jobs in agriculture was the opportunity cost of not having civilisation.

Jan 19, 2016 at 8:20 PM | Registered CommenterPcar

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