Europe’s Green Mightmare

First Casualty Of Green Energy Bill: Steel Giant Tata To Cut 900 UK Jobs
Wales online, 23 November 2012

Rhodri Evans

Steel giant Tata is cutting 900 jobs and closing 12 sites under plans to improve competitiveness, the firm announced today.

Most of the job losses will be in south Wales, including 500 at the Port Talbot plant, under restructuring of management and administrative posts.

A total of 580 jobs will be cut in Wales, 155 in Yorkshire, 120 in the West Midlands and 30 on Teesside.

The proposals include the restructuring of management and administrative functions at Tata Steel’s Port Talbot-based production hub with the loss of around 500 jobs. Around 3,500 are currently employed at the site.

The company is also planning to close its sites at Tafarnaubach and Cross Keys. Production from Tafarnaubach will be relocated to other sites, while the Colorsteels operation will be relocated to Tata Steel’s key site at Shotton, in north Wales.

The move places 154 jobs at risk at Tafarnaubach and Cross Keys, although the restructuring will create 38 new roles in Shotton, Deeside. […]

A Welsh Government spokesman said: “This is very disappointing news, and a massive blow to those who will be losing their jobs.

“The Welsh Government has a very strong relationship with the company and officials will now work with Tata to establish a task force and identify what support we can provide for those affected.

“Tata’s decision reflects the serious and ongoing challenges faced by manufacturing industries during these very difficult economic times. In addition to these challenges, it is clear that high energy costs and uncertainty over UK Government energy policy are having a significant impact on business investment decisions. As a Government, we have warned for some time of the need for these costs to be reduced.

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UK Government Delays Setting Unilateral Carbon Target
BBC News, 23 November 2012

Roger Harrabin, environment analyst, and Anthony Reuben, business reporter

The government has published details of its long-awaited Energy Bill, designed to keep lights on and emissions down.

The government will allow energy companies to charge households an extra £7.6bn, to go towards low-carbon electricity infrastructure by 2020.

A decision about setting carbon emission targets for 2030 has been delayed until 2016, after the election.

Labour said this was a “humiliating failure” by the Lib Dems, who want gas banished from the electricity system.

Environmentalists also condemned the bill, saying it would make it very hard to meet the UK’s law on climate change.

Details of the bill were announced late on Thursday although the bill itself will not be published until next week.

Crudely speaking, the bill has been a battleground between Chancellor George Osborne, who favours gas-powered generation, and the Liberal Democrats, who want clean energy.

The chancellor is adamant that gas will help keep down power bills in the future. He and the Treasury want flexibility in energy choices.

But the Lib Dems want to banish gas from the electricity system almost entirely by 2030 to reduce CO2 emissions in line with the Climate Change Act, although gas will be needed as a back-up.

They say this will also keep power bills down overall by reducing the UK’s exposure to volatile gas prices in a power-hungry world.

Lost the battle

On-going uncertainty over energy strategy has infuriated the firms that are expected to invest more than £100bn to renew the UK’s decaying energy infrastructure by 2020.

It is clear from the announcement that the Lib Dems have lost the battle over the clean energy target.

The decision runs counter to the resolution at the Lib Dem party conference.

In a compromise, the principle of the target will be attached to the bill, but details will not be decided until 2016.

The delay will make it hard for the UK to meet its long-term emissions targets under the Climate Change Act.

The advisory committee on climate change estimates the increase that the £7.6bn allowed for in the bill will add about £110 to the average household energy bill by 2020.

The Department for Energy and Climate Change (DECC) has a lower estimate of £95 – or 7% – although some analysts think it would be more.

DECC believes the clean energy measures will save on bills in the long run. The Energy and Climate Change Secretary, Ed Davey, told the BBC that the measures would eventually save about the same amount. He said the figures being bandied about by others about the impact on bills were “rubbish”.

The chairman of the Commons energy select committee, Tim Yeo, said it was worrying that the government had not introduced an emissions goal for 2030: “There will be concern that the government hasn’t accepted the full implications – which are already clear – of the extent to which electricity generation needs to be decarbonised by 2030”.

Labour criticised the government’s failure to set an emissions target for electricity for 2030.

“It is outrageous that on the day Ed Miliband committed to a tough cut in Britain’s carbon levels by 2030, George Osborne and Ed Davey abandoned their target,” said Caroline Flint, shadow energy and climate change secretary.

Mr Yeo, a Conservative MP, also said he was disappointed at the lack of a target, describing the omission as “significant.” He said it would add to uncertainty for investors.

‘Bill derailed’

Environmental groups have also criticised the government’s announcement.

“By failing to agree to any carbon target for the power sector until after the next election, David Cameron has allowed a militant tendency within his own ranks to derail the Energy Bill,” said John Sauven, executive director of Greenpeace.

“It’s a blatant assault on the greening of the UK economy that leaves consumers vulnerable to rising gas prices, and sends billions of pounds of clean-tech investment to our economic rivals.”

But Energy UK, which represents the energy industry, welcomed the measures.

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UK Energy Bill Will Consign Millions Of Households To Fuel Poverty
The Daily Telegraph, 23 November 2012

Rowena Mason

Energy bills are poised to rise by up to £178 a year under a deal struck between George Osborne and the Liberal Democrats to pay for a series of wind farms and nuclear power stations.

Under the biggest reforms to the energy market in decades, households and businesses will have to pay £7.6billion a year towards the cost of building “greener” power stations by 2020.

This is three times the current level of £2.35 billion per year, as bill-payers are forced to remunerate companies for several new nuclear plants, thousands of wind turbines and potentially “green” fossil fuel stations.

Energy bills have more than doubled since 2004 to more than £1,300 a year per household, largely due to rising gas prices.

Bills will go up over the next two decades by an estimated £178 a year under all the Government’s green and fuel poverty policies, with the contribution to nuclear and renewables making up £95 by 2020.

Green policies have also added to the increasing costs of gas and electricity.

Energy companies warned on Wednesday that a scheme to insulate the homes of poorer households could cost up to £125 per household, rather than the £50 claimed by the Government.

The energy companies, including British Gas, npower, E.ON, Scottish Power, SSE and EDF, are likely to be big beneficiaries from yesterday’s deal because they will be paid to build the power stations and wind farms.

The agreement brings an end to months of wrangling between the Chancellor and Ed Davey, the Liberal Democrat Energy Secretary.

Ministers plan to include the reforms in next week’s Energy Bill, which was delayed while Mr Osborne and Mr Davey argued over the green agenda.

Lib Dem sources said that the party was “extremely pleased” to have won support for the reforms that would mean more wind farms and nuclear power stations were built.

Conservative sources were claiming the compromise deal was a victory for Mr Osborne, after he secured concessions limiting the level of taxpayer cash spent on green energy in the long term.

He threw out Lib Dem demands for a target that would have forced Britain to get all its power from green sources by 2030.

Green groups were last night furious that the “decarbonisation” target has been scrapped.

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Brussels May Kill UK’s Green Deal
Green Click, 23 November 2012

The future of the Government’s flagship Green Deal programme hangs in the balance after an intensifying tax dispute with the European Commission. If, as threatened, Europe sticks to its ruling it means the Green Deal will be grounded because it will no longer be financially viable.

Brussels bureaucrats have warned Whitehall to overhaul the tax rules regarding energy-saving materials or face the prospect of massive fines at the European Court of Justice.

Currently, the UK Treasury levies a reduced rate of 5% VAT for insulation materials for walls, ceilings, floors and water tanks. However, the full 20% rate of VAT still applies to energy-efficient windows and doors.

In August, the European Commission warned the UK Government the reduced 5% tax rate is unlawful and it must change the law or face the prospect of the European Court imposing huge financial penalties.

The UK Government is fiercely disputing the ruling but today a spokesperson for Europe’s Tax Commissioner Algirdas Šemeta said it was unlikely the challenge will be successful and said the UK had only this week filed the formal paperwork to appeal.

“The current infringement proceeding is on the application of the reduced VAT rate to some goods and services which according to the VAT directive would not be subject to this rate,” she added.

“How this infringement interacts with the eligibility criteria of investments under the Green Deal is a domestic UK issue on which we do not have comments.”

However, she warned of a lengthy delay to a final outcome as the Commission deals on average with 400 to 500 infringement cases a month.

If, as threatened, Europe sticks to its ruling it means the Green Deal will be grounded because it will no longer be financially viable.

The energy-saving programme is underpinned by the so-called ‘golden rule’, which means the expected financial savings must be greater than the costs attached to the energy bill.

The imposition of an unexpected quadrupling in tax will rule many green improvements out of the scheme.

A spokesman for DECC admitted the department is closely monitoring the situation but did not want to discuss the implications while the crunch decision from Brussels is awaited.

If, as expected, the case is referred to the European Court of Justice to impose financial penalties the issue could drag on until the middle of next year at the earliest.

In the meantime, the Government is desperate to avoid repeating a boom similar to the Feed-in Tariff for solar PV as it may be penalised further to compensate for the retrospective difference in tax levels.

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China’s Great Green Energy Disaster

Al Fin Energy, 22 November 2012

China’s leadership committed about $290 billion to cleantech. Now, the green bubble is about to burst

One-quarter of China’s wind farms are not connected to a power grid—a reflection of poor planning, insufficient transmission lines, and technical concerns by regional utilities that the intermittency of wind power can be disruptive to normal operations. Wind-related power failures have caused blackouts in three provinces, while exploding equipment has been blamed in the deaths of several workers, according to local press accounts. _BW

Responding to a perceived market for green energy in Europe and North America, China engaged in a massive production build-up of wind turbines and photovoltaic panels. China was successful in building a vast production capacity of green energy generation. And now, China must face the consequences of its great success.

China’s $30 billion solar power industry is overbuilt and heavily in debt. Analysts say even billions of dollars in new government loans may not be able to pull it out of the hole…. Suntech Power Holdings (STP), the world’s largest solar panel maker, announced in September it would cut or reassign 1,500 workers at its photovoltaic cell factory in Wuxi.

Suntech is counting on a $32 million loan from local authorities to avoid more job losses. To stay solvent, LDK Solar (LDK), China’s second-largest maker of solar wafers, was forced to sell a 20 percent stake to a renewable energy investor part-owned by the city of Xinyu, where LDK is headquartered. The support comes as the companies prepare to report combined 2012 losses of $987 million… Regional governments are loath to let their local solar panel makers fail.

… Help from local governments may be the biggest hurdle to making China’s solar industry competitive, says Shyam Mehta, solar analyst at the Boston consulting company GTM Research: “Until they stop supporting the uncompetitive manufacturers, this won’t go away.”

…LDK and Suntech both have balance sheets “so egregious” they would be “imminent bankruptcy candidates if they were American or European,” says Pavel Molchanov, an analyst at Raymond James & Associates. The companies didn’t respond to requests for comment. Molchanov believes infusions of government money won’t stop the losses until China grapples with its massive overcapacity—the same glut of panels that cut global prices by half in the last two years and drove U.S. solar panel makers such as Solyndra out of business.

“Every province, every city, every bank is going to try to protect their vested interest as best they can,” he says. “That’s why kicking the can down the road has been the dynamic so far.” Aaron Chew, an analyst at Maxim Group in New York, concurs: “The government’s subsidy plan is better than nothing, but I don’t think it will save the industry as it’s still not profitable.”

The nation’s investments in wind power are faring no better. One-quarter of China’s wind farms are not connected to a power grid—a reflection of poor planning, insufficient transmission lines, and technical concerns by regional utilities that the intermittency of wind power can be disruptive to normal operations. Wind-related power failures have caused blackouts in three provinces, while exploding equipment has been blamed in the deaths of several workers, according to local press accounts. China Datang Corporation Renewable Power, a state-owned wind energy developer, saw first-half 2012 profits plunge 76 percent, in part because regional utilities simply don’t have the capacity to accept all the energy it produces.

China’s wind turbine manufacturers, responsible for 40 percent of the world’s output, are suffering a double squeeze, as demand has stalled both at home and abroad. Sinovel Wind Group, the world’s largest wind turbine maker by market value, posted a $45 million third-quarter loss this year on an 82 percent drop in sales—its largest loss since its initial public offering in January 2011. _Businessweek

China’s green energy woes should have been expected, given the experience of other nations that followed a similar slippery downhill path.

Epic Failure of Spain’s Grand Green Energy Gesture

Obama’s Legacy of Corrupt Green Failures

Germany pays the price for its green foolishness

Modern industrial power grids cannot tolerate the huge moment-to-moment energy fluctuations of intermittent unreliable energy sources such as big wind and big solar.

Whenever attempting a large scale conversion to “green power,” initial economic costs are exorbitant. The cost of the power plants themselves, the cost of new power grid infrastructure, and the huge cost of maintaining spinning backup power sources. And then there is the cost to society as lower and middle income customers strain to pay skyrocketing power bills.

But the real costs of such an ideologically driven, top-down attempt to transform a national power grid and power supply, begin to emerge as the unreliables approach 20% or more of total power capacity to the grid. The violent and unpredictable intermittency of big wind power in particular, leads to power failures — blackouts, brownouts, selective shutdowns of power customers, etc.

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