WEB EVENT
Climate, energy, ‘crisis,’ and transition: A conversation with Steven Koonin
Join AEI for an in-depth discussion of the future of climate and energy policy, featuring AEI’s Steven E. Koonin, who is the author of “Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters” (BenBella Books, 2021), and Rapidan Energy Group’s Robert McNally, author of the award-winning book “Crude Volatility: The History and the Future of Boom-Bust Oil Prices” (Columbia University Press, 2017).
The participants will cover the state of climate science as portrayed in “Unsettled” and the United Nation’s “Sixth Assessment Report,” the projected economic impacts of a changing climate, the recent energy crisis in Europe, the feasibility of the Joe Biden administration’s climate and energy proposals, and prospects for a rapid and successful energy transition.
Full Event Details
PARTICIPANTS
Steven E. Koonin, Nonresident Senior Fellow, AEI
Robert McNally, President, Rapidan Energy Group
Ryan Streeter, Director, Domestic Policy Studies, AEI
WEB EVENT
Another insightful talk on the current energy situation in Europe:
https://youtu.be/X4rXky4XM04
In the UK pig farmers intend to burn 100,000 + pigs. BoJo + nut-nut need to get them to Drax pronto, but regretfully no HGV transport is available. Talking about pigs couple of days ago I got dozen white stearin candles, might get few more while they are still available.
Wow – that is impressive. In fact, inspiring to see a true world leader with such grasp on reality.
It is interesting to listen to the Russian perspective because Europe, including Russia, have similar energy interconnections as Australian states. The wholesale market in Australia has become incredibly complex as the impact of intermittents has been felt. But Australia has a regulating body that can change the rules without international consequences. I can see it getting very messy in Europe.
Australia’s experience with intermittents needs to be examined by all energy producers and consumers. Most weekends now, rooftop will produce more midday power than black coal. Rooftops are uncontrolled inputs and not subject to price signals. Most days the midday wholesale price for electricity is NEGATIVE. The price usually sits just under the value of the intermittent subsidy; currently about AUD40/MWh. It is the price that causes the grid scale intermittent generators to voluntarily curtail. Coal plants bid at negative price through the middle of the day in order to maintaining output at minimum setting so they do not suffer the costs of disconnecting and reconnecting.
This shows the load profile and generator mix for the last week:
nem
If you look at the fuel mix at midday and subtract rooftops you see that most days now the minimum demand is midday and not early morning. On weekends, the midday output of rooftops usually exceeds black coal generation.
This shows the wholesale pricing for each state in the NEM:
data-dashboard-nem
At 9:15am SA was minus $76/MWh and the other states zero. Negative pricing through the middle of the daily is a common feature this time of year.
Also be aware that the wholesale energy price in Australia is now only about 50% of the actual wholesale price because the FCAS charges, about 10 of them, have become at least as significant as the energy component in price and WAY MORE complex.
Intermittents provide 17% of the NEMs total generation but it has created an incredibly complex system. I expect each generator is using supercomputers to establish their bid profile for each 5-minute interval. There are massive resources tied up in maximising income through the pricing mechanism.
UK Royalty being RE-energy lovers is very bad influence on the minds of people, because they likely have no idea how little all the onshore and offshore wind turbines have benefitted the UK over the past few decades.
Now, Biden’s handlers want to duplicate that in the US.
EXCERPT FROM:
HAVING FUN WATCHING WIND AND SOLAR FAILING TO STEP UP TO POWER THE WORLD ECONOMY
https://www.windtaskforce.org/profiles/blogs/having-fun-watching-wind-and-solar-failing-to-step-up-to-power/edit
INTRODUCTION
Serbia, Hungary and Turkey had recently signed long-term contracts with Russia at about $3/million Btu.
Those countries were vilified by EU bureaucrats and the handmaiden Media.
Subsequently, SPOT prices of gas started to increase, and the three countries are smiling.
EU SPOT prices of gas increased to about $40/million Btu
US SPOT prices increased to about $5/million Btu. See below image.
The EU SPOT price surge is entirely the fault of EU bureaucrats in Brussels, which have urged EU countries NOT to sign long-term gas supply contracts with Russia, because it would send a “the wrong signal regarding fighting climate change”.
NOTE: Often prices are stated as $/1000 m3 of gas
1000 m3 contains 1000 x 35.315 ft3/m3 x 1000 Btu/ft3 = 35,315,000 Btu
$3/million Btu would be 3 x 35.315 = $105.94/1000 m3
$40/million Btu would be 40 x 35.315 = $1412.6/1000 m3
REASONS FOR SPOT PRICE INCREASES
1) EU bureaucrats had urged EU countries not to sign long-term gas supply contracts with Russia, because electricity from wind, solar, etc., would increase, and signing long-term contracts would “send the wrong signal”, plus it would give “evil” Russia more clout in EU energy markets.
2) However, EU bureaucrats did not take into account the vagaries of wind and solar. In that regard, they are far from unique.
From April, 2020, to the present, there has been significantly less wind than in prior years.
Even though more onshore and offshore wind turbine capacity, MW, was installed in the UK, Ireland, Belgium, The Netherlands, Germany and Denmark, that did not result in as much of an increase in wind electricity as predicted.
3) As a result, the shortfall of wind electricity had to be made up by burning more gas and coal, which rapidly increased SPOT prices of gas to $40/million Btu, and also increased the SPOT prices of coal.
4) Then, people became aware, the EU winter storage of gas was very low, compared to prior years, which meant energy markets began to bid up the SPOT prices of gas for future, i.e., winter, delivery.
5) At first, EU bureaucrats tried to hide their lack of planning ability, and blame the shortfalls on market manipulation by Russia.
However, Russia proved, with gas system operating data, it had been transmitting gas to the EU, IN EXCESS of long-term contract requirements; in case of Ukraine, the excess transmission was 10%. Various EU countries, that receive gas from Russia, chimed in to support Russia.
BTW, had the Ukraine gas transmission been any quantity less than per contract, Ukraine would have cried “Russia is using gas as a weapon” to its EU, US, and NATO protectors.
BIDEN’s 30,000 MW OF OFFSHORE WIND SYSTEMS
The Biden administration announced on October 13, 2021, it will subsidize the development of up to seven offshore wind systems (never call them farms) on the US East and West coasts, and in the Gulf of Mexico; a total of about 30,000 MW of offshore wind by 2030.
All systems would have 800-ft-tall wind turbines, which would need to be located at least 30 miles from shores, to ensure minimal disturbance of night-time strobe lights.
Any commercial fishing areas would be significantly impacted by below-water infrastructures and cables.
Total production would be about 30,000 x 8766 h/y x 0.45, capacity factor = 118,341,000 MWh, or 118.3 TWh, which is about 100 x 118.3/4000 = 2.96% of all generation loaded onto US grids. That load would increase due to many millions of future electric vehicles and heat pumps.
The turnkey capital cost for wind systems and grid extension would be 30,000 MW x $5,000,000/MW = $150 BILLION; Biden’s inflation rates may increase that cost.
The all-in wholesale price of the offshore electricity would be about 18 c/kWh, without cost shifting and subsidies, and about 9 c/kWh, with cost shifting and subsidies. See URL
BENEFITS TO EU COMPANIES
Almost the entire physical supply of the offshore wind systems would be provided by EU companies, because they have the required expertise and the domestic onshore and seagoing facilities, due to building at least 25,014 MW (end 2020) of offshore systems, during the past 35 years.
Duplicating the EU onshore and seagoing facilities in the US, PLUS implementing 30,000 MW of offshore wind systems in less than 8 years, 2022 to 2030, would be totally impossible.
https://www.windtaskforce.org/profiles/blogs/high-costs-of-wind-solar-and-battery-systems
GAS STORAGE RESERVOIRS
The EU gas storage reservoirs are way below where they should be at this time of the year.
Filling storage for high levels of winter use, at SPOT prices, would be VERY EXPENSIVE.
In fact, there may not BE enough gas available for adequately filling storage!!
In 2020, gas storage levels were at 90% in January and 55% in April, the low point.
In 2021, gas storage levels were at 74% in January and 30% in April, the low point.
It is already too late to adequately fill the EU storage, because there is not enough available gas, no matter what the price!!
blob:https://wattsupwiththat.com/b86b9665-aa9b-4d52-8f15-75b1a7976cd6
EU THIRD ENERGY PACKAGE
After NORD-STREAM-2, capacity 55 bcm/y, gets final approval by the German government, only one of the two lines would be DELIVERING gas by the end of 2021; the second line would be ready to deliver gas by about March 2022.
But wait, EU bureaucrats have concocted an EU THIRD ENERGY PACKAGE, which effectively states, Russia can use only one of the two NORD-STREAM-2 lines, because the capacity of other line has to be reserved for other gas delivering companies, as part of EU policy of “fostering competition”!
Whereas, there ARE such gas delivering companies, none of them have any gas to ACTUALLY USE those lines, and if they HAD gas, they still could not use them, because the lines, which run under the bottom of the Baltic Sea, connect Russia directly to Germany, with no in/out connections for others.
Now, you can see the level of nuttiness EU bureaucrats engage in just to “protect” the EU from “evil” Russia.
I am not making this up!!
Tens of millions of Europeans will have to put on extra layers of clothes, because it will be COLD in the EU this winter.
EU bureaucrats have mucho eggo on their faces.
Also see LEGAL FIGHT OVER NORD STREAM 2, AS EUROPE ENERGY COSTS SOAR AHEAD OF COLD WINTER
https://www.windtaskforce.org/profiles/blogs/fresh-legal-fight-erupts-over-nord-stream-2-as-europe-energy/edit
I find that hard to believe! But then Australia has spent 20 years and more than $50bn to get 0.6% of its energy production from wind and solar and want to go all-in to get to 100%. I am not making that up either and it is almost as twisted as the EU.
With Trump gone, USA is now vying with the EU for peak stupid. Australia aims to make ground though. ScoMo is packing his bags and is Glasgow bound at the behest of HRH (at least two HRHs we are told)
I doubt that the “HRH” factor is an important factor in the decision to attend, more likely is pressure from Australia’s main allies who are also the two biggest foreign investors.
When the PM attended the last G7 Meeting recently as a guest nation leader the media spent much time nit picking and even suggested that PM Morrison was ignored by POTUS Biden but later there was the announcement of a new stronger defence arrangement, AUKUS agreed upon. A very important achievement.
However, while meeting both POTUS and the UK PM the Australian PM was asked to cooperate with the proposed extension to the Paris Agreement emissions reduction target that Australia is one of the few signatory nations to be on track to achieving, net zero emissions by 2050. No doubt those two allies were the main influence.
PM Morrison resisted the pressure he was put under and pointed out Australia’s success in achieving the Kyoto Agreement emissions reduction (and the IPCC denying Australia credits to apply to Paris Agreement) and being on track with Paris Agreement. He repeated what he has said at home, that the Australian Federal Government has no intention of damaging the economy, no new carbon tax or emissions trading scheme participation for example. That there is an aspirational goal to achieve net zero emissions but only with new technology if developed and to support research and development.
It would not make political sense for the Australian Government to do what it campaigned against it’s Opposition for at the 2019 Federal Election on net zero emissions, and claimed the cost was unaffordable. The figures and related claims are become sillier as time goes on, the Business Council of Australia (one of several business organisations) opposed net zero emissions at the 2019 Federal Election but now supports it and produced a report claiming increased GDP and many new jobs if adopted.
Five Year Plans in private sector businesses are rarely accurate so how could a thirty year plan be accurate?
And remember that Australia’s emissions right now are about 1.3% of global emissions compared to 30% from China.
Considering that Australia has cooperated and has lowered emissions to meet IPCC targets, and is a tiny contributor, how about the would be bullies achieve the targets they agreed to meet and then, maybe, start a new conversation with Australia?
you can watch Alex Epstein interview Koonin at https://www.youtube.com/watch?v=_qIf0m3FFxY&t=1838s