Busted: Climate Advocates Have Identified a Genuine Fossil Fuel Subsidy

Guest essay by Eric Worrall

h/t James Delingpole / Paul Homewood – All these years we said fossil fuels don’t receive a subsidy, turns out we were wrong.

…Some of the alleged subsidies are beyond parody.

For example, included on the ODI’s list is the £4.6 billion Britain spends “subsidising” public transport by not imposing Value Added Tax on it.

Wait? What? Do these greenie loons seriously think it strengthens their case by pretending that the very form of transport greenie loons are always banging on about as the preferable alternative to hideous evil private cars is somehow deleterious to the nation’s environmental purity?

They surely do. Because that’s how eco loons roll, clearly.

I think my favourite piece of stupid on the subsidies list, though, is the one where it appears to include Capacity Market contracts. These are the large sums of money the taxpayer has to fork out to pay owners of diesel generators and suchlike to provide standby capacity to cover for intermittent renewable supplies.

Read more: http://www.breitbart.com/london/2018/06/25/delingpole-fossil-fuel-subsidies-believe-they-exist-bridge-sell-you/

Yep. Substantial fossil fuel subsidies are being payed in Britain, to entice owners of diesel generators to keep their heavily subsidised systems on standby for when useless renewable providers drop the ball.

Australia is about to take this a step further with the National Energy Guarantee, an effort to stabilise Australia’s grid by paying whatever price is demanded by fossil fuel plant owners to maintain production of a set percentage of the grid energy mix from fossil fuels.

The real losers from all this idiocy of course are energy consumers in countries still pretending to commit to the Paris Agreement – what were once relatively free energy markets in Britain and Australia have been replaced with expensive interventionist nightmares which encourage players to game the system for whatever profits can be extracted before the rules change again.

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43 thoughts on “Busted: Climate Advocates Have Identified a Genuine Fossil Fuel Subsidy

  1. As logical as saying that bus drivers suddenly count as green jobs because real green jobs never materialized despite enormous subsidies.

  2. We need nuclear to have really sustainable energy. Molten Salt cooled reactors fueled by thorium. The sooner we get there the better.

    • Thorium is, alas, a dream that fails as it happens. There are two main paths to a Thorium based system.
      – The fast path, being taken by China, does have many of the advantages claimed for Thprium BUT consumes the fuel resource at a rate which would see it depleted in decades.
      China states it will have Thorium reactors avai;able in about 10 years (probably measured from whatever year you are reading that in :-).
      – The slow path – about 40 years on current timetable, is being taken by India. This includes a soimewhat traditional breeging chain where Plutonium and U233 unavoidably ‘happen’ along the way. The end result is a greatly increased Thorium fuel pool which very substantially increases the fuel resource but which introduces all the usual nuclear hazards and objections.
      – India has the world’s largest known / proven Thorium resources. TYhe fact that they are still taking the slow, “dirty” but highly productive path is “educational”.
      – Until very recently India was targeting 63 GWe of new capacity by 2031.
      In April this year the targets were reduced to about 22.5 GWe by 2031 – only about 33% of the prior tartgets!
      ‘Disturbingly’ the cancelled projects included some components neded for the 3 stage Thorium project – raising questions about the timing and likelihood of Thorium use “any time soon”.

      Nuclear Power in India – superb annually+ updated overview of intended Indian program.
      http://www.world-nuclear.org/information-library/country-profiles/countries-g-n/india.aspx

      Intended Th program showing breeder chain and heavy dependence on PU and U233 in the process. http://dae.nic.in/?q=node/212

      Comment on massive scaling down oif past proposals. March 2018.
      https://neutronbytes.com/2018/04/06/india-slashes-plans-for-new-nuclear-reactors-by-two-thirds/

      Google refs: https://www.google.co.nz/search?num=50&source=hp&ei=mjoyW8PvGYrL0AT1raSABQ&q=nuclear+power+in+india+thorium&oq=nuclear+power+in+india+thorium&gs_l=psy-ab.3..0i22i30k1l4.2631.10483.0.10834.32.27.0.4.4.0.241.4257.2-20.21.0….0…1c.1.64.psy-ab..7.25.4477.6..0j35i39k1j0i131k1.207.SSNdgkBJgOU

      • Russel … could u provide more info on the “breeging chain” you speak of in your second point …. sounds very high tech.

          • Jeff – “breeding chain” is shown in several of the references.
            Breeging chain I’m not so sure of :-).
            1. (U238 + U235) as mined + Thorium -> PHW Reactor -> Energy + DU + Pu
            2. [Pu + Du].1 + Pu.2 -> Pu fast breeder ->
            3. U233.2 + Th +U233.3 -> U233 breeder -> Energy

            DU – depleted Uranium (mainly U238)
            Pu.2 = Plutonium from stage 2 etc

            Spilling or content(ment) – choose enny won.

            Russell

        • I did quirk a smile at the obvious spelling disaster, the problem is I can’t figure out for sure what he was trying to spell.

    • I’ve read a little bit about Thorium reactors, and theoretically, they can be scaled down to almost portable size. So, forgetting public antipathy to a nuclear powered vehicle on our roads, it actually may be possible from an engineering standpoint.

  3. With green energy, i.e. unreliables, which require near total conventional backup for a reliable system, any scheme to pay for the backup will get classified as a subsidy, despite the need for backup is inherent in the “renewable” system, not the backup.

    • Unreliables. I like that.

      Greens always claim that FF companies enjoy subsidies, but overlook the fact that they and users of their products pay massive amounts of taxes.

    • The irony here is that by paying traditional generators for capacity/back-up, it is in fact a subsidy to the renewable as implementation of the renewable without backup power would not be done by any responsible grid operator. So the many of the payments they claim are subsidizing fossil fuels are in fact being done to prop up solar and wind.

    • I have been beating this drum for awhile now. I will likely get banned from LinkedIn because, as a comment to a posted/linked article claiming the cost of solar is “…approaching parity…” with FF and nuclear, I pointed out that such was possible only if they ignore the cost of mandatory backup, which they do. I then called a financial analysis employing that oversight fraudulent.

  4. where did this info come from?

    The biggest problem on the grid is when a thermal station suddenly goes off line 500MW in a few seconds

    This has to be covered by stations capable of rapid response – Dinorwig pumped storage was designed with thermal stations in mind – not wind.

    Wind is a distributed source. Wind does not instantly die across the country. CCGT stations can usually be wound to to compensate.
    Diesel stations are small generators that can be used in emergencies when all else fails. Yes they have to be paid for remaining serviceable and available but not to cover intermittency of renewables. but to provide emergency backup when demand exceeds the impoverished supply (through lack of investment).

    During an outage in May 2008 two thermal generators tripped within minutes of each other (see wiki) many of the oil generators were incapable and part of the grid was cut.

    It is highly unlikely oil generators will be used other than for dire situations.

    from http://gridwatch.co.uk/?src=lk01
    Coal : Coal Power Stations – These stations burn coal to produce heat.This is used to heat water to produce steam which turns a steam turbine which drives a generator to produce electricity. There are currently 16 Coal power stations in the UK. The current Governments plan is to shutdown all coal stations by 2025.

    Nuclear : Nuclear Power Stations – These stations use a Uranium nuclear reaction to produce heat. This is used to heat water to produce steam which turns a steam turbine which drives a generator to produce electricity. The output from these is more constant than other power generation. Fluctations usually indicate maintenance, refuelling or problems. There are currently 10 Nuclear power stations in the UK.

    Solar : Solar Power – There is no central recording of Solar Generation. This figure is an estimated figure which comes from Sheffield University. This value is now included in the total UK demand figure

    Wind : Wind Power – This is the power from Wind Farms and does not include unmetered wind turbines. The output from this fluctuates with the wind. There are currently over 6500 wind turbines in wind farms.

    CCGT : Combined Cycle Gas Turbine – These use Natural Gas to power a Turbine which turns a Generator. A second system uses the heat to produce steam which is used to turn a turbine which powers a generator. There are 33 CCGT power stations in the UK.

    Hydro : Hydroelectric – There are approximately 200 Hydroelectric stations in the UK. Most are situated in the Scottish and Welsh Mountain areas.

    Oil : Oil Power Stations – These stations burn oil to produce heat. This is used to heat water to produce steam which turns a steam turbine which drives a generator to produce electricity. Virtually all Oil stations have been decommissioned with just a small reserve remaining.

    Biomass : Biomass – Includes the burning of Wood, Food Residues and straw. This was included in ‘other’ before the 1/11/2017

    Pumped : Pumped Storage Hydroelectric – Pumped storage incorporates two reservoirs. At times of low demand, generally at night, electricity is used to pump water from the lower to the upper basin. This water is then released to create power at a time when demand, and therefore price, is high. There are currently 4 pumped storage stations in the UK.

    OCGT : Open Cycle Gas Turbine – These use Natural Gas to power a Turbine which powers a Generator. These are expensive to run so are only used when necessary. There is currently 1 of these in the UK.

    • Report of May 2008 incident
      https://www.ofgem.gov.uk/sites/default/files/docs/2008/07/national_grid_-_system_events_of_27_may_for_dswg_16_july.pdf

      How the grid responds to loss of a nuke thrown offline by storm of 2013-10-28:

      https://1.bp.blogspot.com/-N47HXb7EAns/UnhleGWlgJI/AAAAAAAABQw/KboUies1WPc/s1600/2hours+round+nuclear+dropout.jpg

      OCGT (inefficient gas) is brought online in case it is needed (only 50MW is utilised – past OCGT has provided up to 400MW)

      • Coal/NG/oil/Nuke Rankine and simple NG/oil Brayton cycle efficiency: about 35%.
        NG combined cycle efficiency: about 60%
        Guessed the currently preferred cycle for new capacity.

        • Well the Hughes report pointed out that more renewable energy would mean less CCGT and more OCGT.

          http://vps.templar.co.uk/www.templar.co.uk/downloads/hughes-windpower.pdf

          Why is that?

          Quite simply, because when you are building peak demand following kit, which is operating on a very low capacity factor – say 15% or less – to cover the deficiencies of renewables, you are not going to spend money making it efficient, just to save a bit of fuel when, in the event, the spot price or electricity will be so high it doesn’t matter what the fuel cost is..

          You will go for low capital cost, high fuel cost every time.

          This of course completely negates any carbon gains from renewables.

          But that doesn’t matter, since the point of renewables is not to reduce CO2 emissions. It’s to keep the stupid greens happy and rip off the stupid consumers.

    • The FordPrefect

      ” Dinorwig pumped storage was designed with thermal stations in mind – not wind.”

      Yeah, for covering peaks and to store energy during off-peaks. It cannot possibly be used to cover for shortfalls in wind.

      “Wind is a distributed source. Wind does not instantly die across the country. CCGT stations can usually be wound to to compensate.”

      So what if it dies slowly over a few minutes or hours? If it dies it is gone and something else has to take up the slack – for a long time, on occasion. Pumped storage has no useful place in such a scheme – it is for predictable peak loads and spots of a predictable drop in demand.

      The subsidies paid to diesel generating capacity owners is simply another of the hidden costs of having a wind-powered economy. It is not a ‘fossil fuel subsidy’, it is an ancillary cost of having wind and solar – an overhead that has to be borne in order to be a first class virtue signaler.

      Ontario government Premier Wynne achieved this cherished status. There was a small price to pay and a large price to pay: the small price was the destruction of her political party (no one misses them). The big price is the multi-billion dollar 20-year bill handed to Ontario consumers. In short, the smell is gone but the subsidies linger.

    • And according to gridwatch these 6500 windmills are producing 0.30 GW. If my calculations are correct this averages out at 46,154 watts each. Enough for 23 electric kettles. And how do I charge my EV to get to work?

    • Dinorwig pumped storage was designed to aid at time of peak power demand not to cover for baseload off line incidents.

    • “It is highly unlikely oil generators will be used other than for dire situations.”

      Like in South Australia last summer, when people wanted their air conditioners to work when they turned the switch. Next summer, even more coal fired power stations will be out commission (soon to be dynamited by the crazy greens) and we will need to pay whatever it takes to keep the power on. Yes, diesel generators are expensive, but at least they work. Wind power is usually idle on the hottest days.

    • It doesn’t matter that there are wind turbines all over the country. All that matters to the local grid is the local turbines, and they do all shut down at once. And a lot more frequently than do thermal power stations.
      BTW, in your instance of a grid instability causing thermal power plants to disconnect from the grid, your wind turbines would have done the exact same thing, for the exact same reason.

  5. And here I thought the loons had flown north for the summer. Apparently, I was wrong unless they carried cell phones on their backs so they could post this drivel.

  6. Another example of changing the meaning of a word to make the argument. Not being taxed cannot possibly be a subsidy – a subsidy is money from outside the two parties in a transaction that alters the underlying economics of production or consumption such that either the producer receives more than he should or the consumer pays less than he should (or both).

    Taxes are paid by the parties to a transaction to a third party – the government. That is the opposite of a subsidy. But not having a tax doesn’t give you the opposite of a non-subsidy, (i.e. a subsidy) it gives you the neutral position.

    The (deliberate) error being made is to see only two positions – taxed and subsidy – when there are more than two.

    • I beg to differ. Obviously, not being taxed when everything else is taxed, is equivalent to getting a subsidy equal to the tax, and it DOES “alter the underlying economics of production or consumption such that either the producer receives more than he should or the consumer pays less than he should (or both).”
      The trick is, you need to decide which is the relevant “normal tax” or “normal price” you calculate the subsidy out of.
      For instance, Saudis are selling oil way cheaper on their domestic market, than they do to foreigners, but it is up to you to decide if the “normal price” is the domestic’s (so they reap off foreigners) or the foreigners’ (so they “subsidy” the domestic)

      • Beg all you like, we’re still not buying it. A subsidy is when someone puts money in your pocket you never had in the first place. Shifting the tax burden from “A” to “B” is not a subsidy for “A”. You could have simply cut your spending.

        A tax credit for installing a solar PV system is likewise not a subsidy, but forcing the grid operator to pay more for the electricity that you put back into the grid at higher than the market rate, is.

    • So if cars with green paint are less taxed than those with yellow paint, it doesn’t count as a subsidy?

  7. The global warming/climate change scam continues to rob the energy consumer. As with most conjured religions Greens accept “the ends justify the means”. One scam always follows another.

  8. “…Capacity Market contracts…”

    That isn’t actually a subsidy. It is a fee for service contract, whereby somebody is being paid to keep the lights on, so that other people can treat intermittent wind & solar as if they were reliable. There are real costs involved, too. Maintenance is needed for every so many hours of operation, fuel and lubrication is needed to keep the engines ticking over, staff are needed to monitor the system.

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