It seems strange to have to explain why nuclear power isn't green, but it is all over the British press from the Government that it is, and that electricity consumers will be supporting 'green energy' with increased bills. Consumers may think that most or all of this is going to renewable energy. But, under the Government's 'electricity market reform' proposals a lot will be diverted to support nuclear power - both old and new, through two ways. One is because fossil fuel prices are being increased to make non-fossil sources relatively cheaper, and another is through a new scheme called the 'low carbon mechanism'. This will be organised by government in what will be no doubt a rather opaque fashion to funnel an additional precept from consumer electricity bills to fund new nuclear. What is left will go to renewable energy through an 'auction' system that has long been discredited (see earlier blog). In doing so, of course, it does not take a great deal of imagination to see that the renewable energy programme will not be anything like as big as if all the money was going to start new renewable energy schemes rather than support nuclear power. Quota auctions are being introduced to limit the amount of offshore and onshore windfarms that can get access to cross subsidies for consumers so that the rest can be reserved for the new nuclear power stations that companies like EDF and E.On want to build.
According to the Government this is going to be a balanced way of distributing money to green energy sources. Nuclear Power - green? How is it going to solve the global environmental crisis? Evidently by creating another one - a nuclear proliferation crisis. If a lot of countries start using nuclear power to reduce carbon emissions there will quite quickly be a uranium crisis (oil crises with radioactivity) which according to the nuclear industry will be stopped by building 'fast breeder' reactors. Whilst ordinary nuclear power stations (just?) use fissile materials, fast breeder reactors (which have never been made to work properly) actually generate fissile materials. They are nuclear bomb factories. This was why the green movement turned against nuclear power 30 years ago. Let's stop this happening by demanding that all consumer subsidies for green energy go to renewable energy or energy efficiency with a system of German style feed-in tariffs used to support renewable energy.
Part 1 of: Thoughts on an international feed-in law
ReplyDeleteby Dr.-Ing. Dipl.-Phys. Gregor Czisch
June 2009
slightly revised version 2010
(An older version of the thoughts can be found in the “Mitigation Country Study for Germany” for the UN Human Development Report 2007/2008 "Fighting climate change: Human solidarity in a divided world." http://hdr.undp.org/en/reports/global/hdr2007-8/papers/Czisch_Schmid.pdf Within a box under the title "International feed in law")
Concerning investments in order to make use of renewable energies in most cases the most important cost factors are payback period, interest rate and return on equity. This is different from most conventional sources of energy, since here the variable costs contribute the biggest part, mainly fuel prices, such as for coal and natural gas. Security of investment is therefore an important issue in creating a rapid growth of the use of renewable energies. Furthermore, in many African states the cost of financing (e.g. interest rates) is very high, because e.g. security of repayment is considered low. But this problem could be overcome by cooperating with partners regarded as financially trustworthy.
What is therefore important is to create a framework which provides long term security for return on investments. Otherwise the cost of capital will also rise due to low leverage effects, causing high shares of expensive equity capital and the need for higher short term returns to counteract the long term uncertainties. Missing long term security on volatile and unpredictable markets can even make it impossible to get investment in renewable energies started.
Different kinds of feed-in tariffs or similar support schemes have therefore been most efficient in creating a basis for the use of renewable energies. Such instruments are the German EEG – a feed-in law with definite long term feed-in tariffs – or the Spanish feed-in tariff as well as the US American Production Tax Credit (PTC), which also has to be considered as being a certain kind of feed-in tariff. All of these national instruments have been very successfully created a rapid growth of the use of renewable energies – namely wind energy - on a national scale.
For a multilateral cooperation such as foreseen in the Africa-EU Energy Partnership, the national borders of these instruments have to be overcome. A fast growth of using renewable energies could be obtained by an “international feed-in law” as described in the following paragraphs taking effect across national borders. Such support schemes could lead to a win-win situation for all participants as well as for the climate, and might be a core instrument for creating a real partnership beyond a development policy approach.
Part 1: Thoughts on an international feed-in law
ReplyDeleteby Dr.-Ing. Dipl.-Phys. Gregor Czisch
June 2009
slightly revised version 2010
(An older version of the thoughts can be found in the “Mitigation Country Study for Germany” for the UN Human Development Report 2007/2008 "Fighting climate change: Human solidarity in a divided world." http://hdr.undp.org/en/reports/global/hdr2007-8/papers/Czisch_Schmid.pdf Within a box under the title "International feed in law")
Concerning investments in order to make use of renewable energies in most cases the most important cost factors are payback period, interest rate and return on equity. This is different from most conventional sources of energy, since here the variable costs contribute the biggest part, mainly fuel prices, such as for coal and natural gas. Security of investment is therefore an important issue in creating a rapid growth of the use of renewable energies. Furthermore, in many African states the cost of financing (e.g. interest rates) is very high, because e.g. security of repayment is considered low. But this problem could be overcome by cooperating with partners regarded as financially trustworthy.
What is therefore important is to create a framework which provides long term security for return on investments. Otherwise the cost of capital will also rise due to low leverage effects, causing high shares of expensive equity capital and the need for higher short term returns to counteract the long term uncertainties. Missing long term security on volatile and unpredictable markets can even make it impossible to get investment in renewable energies started.
Part 2 of: Thoughts on an international feed-in law
ReplyDeleteby Dr.-Ing. Dipl.-Phys. Gregor Czisch
June 2009
The German feed-in law EEG was one of the biggest success stories for pushing new renewable energy supplies in the world. To create a similar success beyond national borders, an international feed-in law would be very helpful and if carefully arranged it might in all likelihood promote the use of renewable energies more than any other measure. Below, the concept will be detailed using the German EEG as a basis for further discussion.
The EEG commits the utilities in Germany to accept any feed-in of electricity from wind power and other renewable sources into the electricity grid. It furthermore commits the utilities to provide an appropriate electricity network which has the capacity to take the renewable electricity. The EEG also commits the utilities to pay a definite minimum feed-in tariff for the renewable electricity – depending on the kind of renewable source used for its production. The total costs are divided accordingly to the utilities’ end users’ electricity consumption amongst the utilities. One of its outcomes was the rapid growth of electricity production from wind energy, which made Germany the world leading wind energy country for many years.
Such an instrument could easily be developed and used as a component of the international energy policy and its effect should be improved. One possible international approach would be to extend existing national feed-in tariffs and laws – such as the German EEG – to agreements which can be ratified by other nations, or bring a similar arrangement in the international agenda – for example as a new instrument for the Africa-EU Energy Partnership. These agreements should come into operation as soon as two countries have signed. Further cooperating states should follow.
Part 3 of: Thoughts on an international feed-in law
ReplyDeleteby Dr.-Ing. Dipl.-Phys. Gregor Czisch
June 2009
All cooperating states follow with the aim of developing a rapid growth of the use of renewable energies and commit themselves on a long-term basis to change to a sustainable CO2-neutral electricity supply. The cost of electricity is to be divided - as with the today's EEG – proportionately according to the respective electricity consumption of the final customers within each country. This would mean that most of the costs would be paid by the industrialized countries with high electricity demand. Deviating from the German EEG – as with the Spanish feed-in regulation – it seems sensible that only extra costs above a certain minimum are paid by the new community of responsible states. This minimum is to be agreed on by each country signing the agreement for each source of electricity (wind, solar, hydro, biomass ...). The minimum should be covered by the country which consumes the electricity.
The international character of the contract – with strong economies as partners guaranteeing for the payment of the feed-in tariff to the producer – should be an incentive for world-wide investors and should be a basis for credits offered with low interest rates and low demand of equity capital. Further instruments like soft loans from development banks or similar organizations and public guarantees might also be part of the concept in order to reduce the costs of financing and therefore the costs of electricity.
This international feed-in law should – at least in the longer run – contain three steps to create an appropriate internationally effective instrument. The first step is to pay for the electricity fed into the electricity network of each country, produced within the same country. Therefore it might be necessary to agree on a supplementary treaty that guarantees that the costs of the extension of the national electricity network are also included into the feed-in tariff. This is important if e.g. the good resources are far away from the existing network and if the country might not be able to easily afford the expenditures. The feed-in tariff has to be built in such a way that the energy specific tariff is lower at better sites, but still stimulates the search for the best sites. The two next steps should incorporate the possibility to produce the renewable electricity within one country and – as the second step – consume it in neighboring countries as well as – as the third step – in third countries which means the development of rules for a third party access. This third step aims to successively erect an international renewable electricity supply system. Following these steps it can be ensured that large favorable potentials of renewable energies can also be used in countries, which have small energy consumption or are not easily able to afford the use of their renewable potentials. Thus, as an international task, these potentials can be placed into the service of climate and resource policy. This form of “EEG” can thereby either be started bilaterally, as a European and African approach within the Africa-EU Energy Partnership, or as an international agreement for international ratification, whereby an anchorage in the UN appears particularly advisable. The mechanism could eventually also be developed as a new “kind of CDM”. The remuneration of renewable energy from abroad can be seen as a preparation of the second step of the export.
Part 3 of: Thoughts on an international feed-in law
ReplyDeleteby Dr.-Ing. Dipl.-Phys. Gregor Czisch
June 2009
All cooperating states follow with the aim of developing a rapid growth of the use of renewable energies and commit themselves on a long-term basis to change to a sustainable CO2-neutral electricity supply. The cost of electricity is to be divided - as with the today's EEG – proportionately according to the respective electricity consumption of the final customers within each country. This would mean that most of the costs would be paid by the industrialized countries with high electricity demand. Deviating from the German EEG – as with the Spanish feed-in regulation – it seems sensible that only extra costs above a certain minimum are paid by the new community of responsible states. This minimum is to be agreed on by each country signing the agreement for each source of electricity (wind, solar, hydro, biomass ...). The minimum should be covered by the country which consumes the electricity.
The international character of the contract – with strong economies as partners guaranteeing for the payment of the feed-in tariff to the producer – should be an incentive for world-wide investors and should be a basis for credits offered with low interest rates and low demand of equity capital. Further instruments like soft loans from development banks or similar organizations and public guarantees might also be part of the concept in order to reduce the costs of financing and therefore the costs of electricity.
Part 4 of: Thoughts on an international feed-in law
ReplyDeleteby Dr.-Ing. Dipl.-Phys. Gregor Czisch
June 2009
This international feed-in law should – at least in the longer run – contain three steps to create an appropriate internationally effective instrument. The first step is to pay for the electricity fed into the electricity network of each country, produced within the same country. Therefore it might be necessary to agree on a supplementary treaty that guarantees that the costs of the extension of the national electricity network are also included into the feed-in tariff. This is important if e.g. the good resources are far away from the existing network and if the country might not be able to easily afford the expenditures. The feed-in tariff has to be built in such a way that the energy specific tariff is lower at better sites, but still stimulates the search for the best sites. The two next steps should incorporate the possibility to produce the renewable electricity within one country and – as the second step – consume it in neighboring countries as well as – as the third step – in third countries which means the development of rules for a third party access. This third step aims to successively erect an international renewable electricity supply system. Following these steps it can be ensured that large favorable potentials of renewable energies can also be used in countries, which have small energy consumption or are not easily able to afford the use of their renewable potentials. Thus, as an international task, these potentials can be placed into the service of climate and resource policy. This form of “EEG” can thereby either be started bilaterally, as a European and African approach within the Africa-EU Energy Partnership, or as an international agreement for international ratification, whereby an anchorage in the UN appears particularly advisable. The mechanism could eventually also be developed as a new “kind of CDM”. The remuneration of renewable energy from abroad can be seen as a preparation of the second step of the export.
Part 5 of: Thoughts on an international feed-in law
ReplyDeleteby Dr.-Ing. Dipl.-Phys. Gregor Czisch
June 2009
Such an international “EEG” could become a kind of development assistance for states in the south and the east of the European Union and world-wide. It would simultaneously be of advantage for the richer industrialized countries involved since it enables the use of highly economical potentials and thus guarantees cheap renewable electricity. Thereby a substantial effect of an international “EEG” should be to open for the use of particularly favorable sites for different renewable energies and to include them in an international system. This acquires more economical solutions for climate protection than making single-handed national attempts.
This international co-operation in the field of electricity production and transmission opens up the possibility of a sustainable electricity supply from renewable energies only, which would not be – even if only current technologies where used – more expensive or possibly even cheaper than our current electricity supply (Fundamental research has proven this and is published in all details in Czisch, G. (2005), Szenarien zur zukünftigen Stromversorgung – Kostenoptimierte Variationen zur Versorgung Europas und seiner Nachbarn mit Strom aus erneuerbaren Energien: Dissertation, Uni Kassel,
https://kobra.bibliothek.uni-kassel.de/bitstream/urn:nbn:de:hebis:34-200604119596/1/DissVersion0502.pdf .
For a short English summary see also Czisch, G. (2006), Low Cost but Totally Renewable Electricity Supply for a Huge Supply Area, http://transnational-renewables.org/Gregor_Czisch/projekte/LowCostEuropElSup_revised_for_AKE_2006.pdf .). This makes transnational electricity transmission via renewable Supergrids important. Therefore such a conversion to renewable energies and a way of mitigating the climate change could most likely lead to economical savings instead of causing mitigation costs, as they are frequently taken as an inevitable fact if climate issues are discussed. Furthermore the savings will continually become larger since the generation of renewable electricity becomes cheaper with further techno-economic progress. Such a concept opens up comparably huge investments in poorer countries with good renewable potentials and therefore creates a multiple win-win situation for all participants providing an economically and technically sound strategy against climate change.
Part 5 Thoughts on an international feed-in law
ReplyDeleteDr.-Ing. Dipl.-Phys. Gregor Czisch
June 2009
Such an international “EEG” could become a kind of development assistance for states in the south and the east of the European Union and world-wide. It would simultaneously be of advantage for the richer industrialized countries involved since it enables the use of highly economical potentials and thus guarantees cheap renewable electricity. Thereby a substantial effect of an international “EEG” should be to open for the use of particularly favorable sites for different renewable energies and to include them in an international system. This acquires more economical solutions for climate protection than making single-handed national attempts.
This international co-operation in the field of electricity production and transmission opens up the possibility of a sustainable electricity supply from renewable energies only, which would not be – even if only current technologies where used – more expensive or possibly even cheaper than our current electricity supply (Fundamental research has proven this and is published in all details in Czisch, G. (2005), Szenarien zur zukünftigen Stromversorgung – Kostenoptimierte Variationen zur Versorgung Europas und seiner Nachbarn mit Strom aus erneuerbaren Energien: Dissertation, Uni Kassel,
https://kobra.bibliothek.uni-kassel.de/bitstream/urn:nbn:de:hebis:34-200604119596/1/DissVersion0502.pdf .
For a short English summary see also Czisch, G. (2006), Low Cost but Totally Renewable Electricity Supply for a Huge Supply Area, http://transnational-renewables.org/Gregor_Czisch/projekte/LowCostEuropElSup_revised_for_AKE_2006.pdf .).
Part 6 (last part) Thoughts on an international feed-in law
ReplyDeleteDr.-Ing. Dipl.-Phys. Gregor Czisch
June 2009 This makes transnational electricity transmission via renewable Supergrids important. Therefore such a conversion to renewable energies and a way of mitigating the climate change could most likely lead to economical savings instead of causing mitigation costs, as they are frequently taken as an inevitable fact if climate issues are discussed. Furthermore the savings will continually become larger since the generation of renewable electricity becomes cheaper with further techno-economic progress. Such a concept opens up comparably huge investments in poorer countries with good renewable potentials and therefore creates a multiple win-win situation for all participants providing an economically and technically sound strategy against climate change.