Wind Power spells “Doom” for European Economies

industrial-decline-2

The great wind power fraud sends Europe to the wall.

European Economic Stability Threatened By Renewable Energy Subsidies
Forbes
James Conca
20 October 2013

The stability of Europe’s electricity generation is at risk from the warped market structure caused by skyrocketing renewable energy subsidies that have swarmed across the continent over the last decade.

This sentiment was echoed a week ago by the CEOs of Europe’s largest energy companies, who produce almost half of Europe’s electricity. This group joined voices calling for an end to subsidies for wind and solar power, saying the subsidies have led to unacceptably high utility bills for residences and businesses, and even risk causing continent-wide blackouts (Géraldine Amiel WSJ).

The group includes Germany’s E.ON AG, France’s GDF Suez SA and Italy’s Eni SpA, and they unanimously pointed the finger at European governments’ poorly thought-out decision at the turn of the millennium to promote renewable energy by any means.

The plan seemed like a good one in the late 1990s as a way to reverse Europe’s reliance on imported fossil fuels, particularly from Russia and the Middle East. But it seems the execution hasn’t matched the good intentions, and the authors of the legislations didn’t understand the markets.

“The importance of renewables has become a threat to the continent’s supply safety,” warned senior global energy analyst, Colette Lewiner, referring to a recent report by a Europe energy firm, Capgemini.

“We’ve failed on all accounts: Europe is threatened by a blackout like in New York a few years ago, prices are shooting up higher, and our carbon emissions keep increasing,” said GDF Suez CEO Gérard Mestrallet ahead of the news conference.

Under these subsidy programs, wind and solar power producers get priority access to the grid and are guaranteed high prices. In France, nuclear power wholesales for about €40/MWhr ($54/MWhr), but electricity generated from wind turbines is guaranteed at €83/MWhr ($112/MWhr), regardless of demand. Customers have to pick up the difference.

The subsidies enticed enough investors into wind and solar that Germany now has almost 60,000 MWs of wind and solar capacity, or about 25% of that nation’s total capacity. Sounds good for the Planet.

The problems began when the global economic meltdown occurred in 2008. Demand for electricity fell throughout Europe, as it did in America, which deflated wholesale electricity prices. However, investors kept plowing money into new wind and solar power because of the guaranteed prices for renewable energy.

Meanwhile, electricity prices have been rising in Europe since 2008, just under 20% for households and just over 20% for businesses, according to Eurostat.

Since renewable capacity kept rising and was forced to be taken, utilities across Europe began closing fossil-fuel power plants that were now less profitable because of the subsidies, including over 50 GWs of gas-fired plants, Mr. Mestrallet said.

I’m a little confused, isn’t gas supposed to be the savior along with renewables? You can’t have a lot of renewables without back-up gas to buffer the intermittency of renewables since gas is the only one you can turn on and off like a light switch.

I understand that Germany is building new coal plants that can ramp up and down faster than ever before, but the replacement of so much gas with renewables means Europe may not be able to respond to dramatic weather effects, like an unusually cold winter when wind and solar can’t produce much.

In a warped parody of free market economics, some countries are building gas-fired plants along their borders to fill this void in rapid-ramping capacity, and that scares the markets even more, since gas is so expensive in Europe, that the price for electricity will climb even higher.

As the European Commission meets this week to discuss the issue, a parallel threat looms in America as a result of a similarly well-intentioned maze of mandates and subsidies over the last decade. It has been kept at bay only by our much larger energy production and our newly abundant cheap natural gas.

Americans may not be aware that natural gas is not cheap in Europe like it is in America. America’s gas boom has occurred in the absence of a natural gas liquefying infrastructure, which is needed for import/export of natural gas to the world markets. Thus, the more expensive global prices do not affect the price in the U.S.  Yet.

But that will change. We’re building LNG infrastructure at an amazing pace to exploit the huge gas reserves laid bare by advances in fracking technologies. Within five years, the U.S. will be the major player in the world gas market. Of course, gas prices will double or triple in the U.S. because, like oil, the price will now be set by the global market, not by the U.S. market. And like oil, it doesn’t matter how much you produce in your own country, you pay the global price. Period. Just ask Norway.

So when natural gas prices double, what happens to the price of electricity since gas is so intimately married to renewables? State mandates and renewable production tax credits will still require us to buy renewable energy, even if it’s double the price. We’ve already seen this occur here in the Pacific Northwest in battle between expensive wind and inexpensive hydro (Hydro Takes A Dive For Wind). Hydro lost.

That’s fine when gas is cheap. It won’t be fine when gas is expensive.
Forbes

Wind power is going to leave Europe freezing in the dark, but it was all for the “greater good”.

That’s right, Fraser.  Thanks to costly, inefficient and unreliable wind power, Europe’s doomed.

Fraser

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Paul Miskelly says:

    This is very scary stuff indeed. The provision of a secure, reliable electricity supply is absolutely critical to our civilisation. Even a single widespread blackout, let alone the frequent, unpredictable ones suggested by these reports, leads to chaos. Veteran readers of stopthesethings will be aware that I have had a scholarly paper published in the UK journal Energy & Environment that predicts the type of wind power-induced instability – that in the extreme may lead to blackouts – that the European energy companies are now reporting as being a possibility. In the paper I analyse real, live wind farm performance data from the eastern Australian grid for the full year 2010. This is not computer modelling. I emphasise that I take no joy whatsoever by seemingly being proved correct in the paper’s findings by these reported comments from Europe. In my view, the mad pursuit of wind energy in our respective countries is leading us into chaos, not to mention the terrible plight that is being foisted upon some of our hardest-working citizens, our rural residents, by the incessant noise these monstrosities produce. And for no discernible reductions in CO2 emissions whatsoever. The message is clear: here in Australia the MRET subsidy scheme must be abandoned. For those who have yet to view it, the paper may be freely downloaded at:
    http://multi-science.metapress.com/content/f1734hj8j458n4j7/?p=e56d8a20c32d4eaca70ebd3623a0721f&pi=4 .

  2. David Mortimer says:

    Are our government’s ears painted on? Just how much more loudly and clearly can the message be stated? The detrimental side of wind goes far further than our wildest nightmares. Just try living in a wind energy facility for a start. Believe me, it is not fun.

  3. “European governments’ poorly thought-out decision at the turn of the millennium to promote renewable energy by any means.”
    what he meant to say was that they “cunningly devised a plan that would transfer taxpayer dollars to companies that they just happened to have massive equity stakes in”.
    Traitors by any other name.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: