Can’t stay a top-ten manufacturer on expensive power
By Andrew Orlowski • Get more from this author
Posted in Environment, 4th September 2011 10:00 GMT
The UK’s headlong rush into renewable energy – one ignored by the rest of the world – will hit British jobs and then general incomes, an economic study finds.
The report, The Myth of Green Jobs by economist Professor Gordon Hughes of Edinburgh University, examines the long-term impacts of subsidising expensive “green” renewable energy projects. It says that if the UK continues to do so, it will lose 2 to 3 per cent GDP a year for around 20 years. If reducing CO2 emissions is your goal, says Hughes, your economy really can’t afford renewable energy.
How does he get to this figure?
He explains that one reason is that labour inputs are a cost, not a benefit. This is common sense: the goal for a productive economy is to have the highest value creation at the lowest cost. If your workforce is mostly employed doing the basics, such as cultivating manglewurzels, it is going to have fewer doctors, teachers or rocket scientists. North Korea is a good example. Or, for the same cost, you can have a cleaner environment.
(Hughes uses the example of two crops, one of which requires 50 hours of labour per hectare, and one that requires 100 hours of labour.)
“All forms of green energy tend to be substantially more expensive than conventional energy, so there is a trade-off between higher costs and lower emissions,” writes Hughes. “This trade-off is not specific to green energy, since there are many ways of reducing emissions of greenhouse gases. Hence, the starting point of any assessment of such programmes should be the total cost per tonne of carbon dioxide saved – or its equivalent – which will be incurred by relying upon different measures or policies to reduce emissions.”
Turning to job creation, Hughes points out that short-term gains will be cancelled out by medium- to long-term pain. Investing in renewables, the EU Commission claims, will create two million jobs, a figure not supported by any evidence.
But Hughes explains, higher costs don’t just disappear from an economy – they must materialise somewhere.
“In terms of the labour market, the gains for a small number of actual or potential employees in businesses specialising in renewable energy has to be weighed against the dismal prospects for a much larger group of workers producing tradeable goods in the rest of the manufacturing sector.”
Medium- and long-term costs of chucking money at “green” energy projects reduces the productive capacity and income levels of an economy. In addition, energy costs (for everyone) need to rise 100 per cent to subsidise the green energy. The strategy is predicated on “setting an example” to the world that other economies will follow. But other countries aren’t following. This means costs rise for manufacturing and related sectors, with the likely results these will relocate, and be lost to the UK economy.

Some numbers, then. Meeting the EU’s target of a 20 per cent reduction in greenhouse gas emissions by 2020 requires £120bn of investment at current prices, over the replacement of current capacity that will be taken offline. Opting for gas-fired plants would cost around £13bn. Over 2006 to 2009 total investment in energy utilities (plus water) averaged £7.6bn per year, while business put in $142bn per year. So one extra year’s business investment (outside the electricity sector) is required to reach the target.
“Adding 200 per cent to historic levels of investment in the energy sector will create supply bottlenecks and demand-driven inflation for capital goods. Either the planned increase in capacity will not occur or it will prove to be much more expensive than the base costs suggest. Second, this amount will represent a diversion of more than 10 per cent of non-electricity business investment into renewable energy, unless there is a significant reduction in household or government consumption to finance an increase in total investment expenditure,” writes Hughes.
Professor Hughes also points out something often overlooked. The Bank of England has a duty to keep inflation to 2 per cent a year. If energy costs are rocketing, it must pursue policies to deflate other parts of the economy.
No evidence suggests that renewables will become affordable. While we might expect renewable technologies to become more efficient, conventional energy (and nuclear) also improve in efficiency. And the current renewables are a long, long way behind – and so vastly more expensive.
“There is no general reason to assume that future technical progress and improvements in efficiency will favour renewable sources of energy over non-renewable sources… [and] no reason the UK can gain a comparative advantage in the manufacture of renewable energy equipment by any combination of policies that are both feasible and affordable,” Hughes writes.
There’s no way of escaping the fact that today’s renewables are simply a vastly inferior technology, and this comes at a huge cost. An economy directed towards the creation of “Green Jobs” will look a lot like North Korea. Except perhaps the manglewurzels will be 100 per cent certified organic. ®

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Green Energy

by Andy Ciordia

Go Green Energy Solutions, The Eco-Friendly Choice For A Life-Friendly World

Article by Jay Nelson

There are various sorts of green power that we can harness if we only develop the technologies we currently have. We can lessen the use of fossil fuels and the old electrical grids by using these power alternatives for our power resources. To go green energy solutions or alternative power is one of the eco-pleasant choices we have today to help lessen our power and ecological problems.

One instance of alternative power or green power resources is wind energy. Wind turbines are one of the earliest types of harnessing power. Nowadays wind energy is progressively developed because it is much more power efficient and much less pricey. “Wind farms” have been springing up in numerous nations, and they have even become much more strategically positioned over time so that they are not jeopardizing birds as early designs of wind turbines did. So, again, harnessing wind power is one of several go green energy solutions to seriously consider.

An additional useful alternative power resource is solar power. This kind of power is the most abundant one of all because it refers to harnessing of power from the sun. Taking advantage of this power source involves the manufacturing of solar cells which gather and focus the power given off directly by the sun, and then transfer it into electrical energy or, in some instances, scorching water. Major emphasis is being placed on learning how to benefit from these valuable go green energy solutions.

Ocean wave power is observed by governments and investors as having huge power generating possibilities. A generator in France has been in operation for numerous years now and is regarded as delivering fantastically good results, and the Irish and Scots are running experimental projects as well. This type of power generation is still in very early development stages in other nations, but excitement over its potential is building and may soon elevate it to join the other go green energy solutions.

Hydroelectric energy has been used for numerous years now. It is a powerful generator of electrical energy and cleaner than a fossil-fuel grid. However, there are particular restrictions to the availability of the correct locations to set up a large dam. There are also some instances of destruction of all-natural water sheds due to building of large dams. Therefore, as go green energy solutions are rated, hydroelectric energy is more limited in its potential for the future than are other systems.

Read more http://www.modelsforgreenenergy.net/2012/01/30/go-green-energy-solutions-the-eco-friendly-choice-for-a-life-friendly-world/

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Green Energy And Its Many Advantages
Posted on October 9, 2010 by
Green energy is expected to be the great industry of the 21st Century, paying great dividends to the country or countries that pioneer and successfully capitalize on it. Economically, environmentally, and even militarily, the capability to produce sustainable forms of energy is really a prize which will set the fate of the world for centuries to come.
Unfortunately, the United States is in danger of losing the green energy race. Our nation is addicted to oil and the politicians are addicted to corporate money, so change has been almost impossible.
On the other side of the world, literally, are the leaders of China, who have set out on an ambitious plan to manufacture solar panels as well as implement solar farms themselves for domestic use. The Chinese are also big on wind farms and nuclear power, other technologies which Americans first developed but have now abandoned.
Sounds ominous? The chattering classes are all up in arms about the issue, but nothing has been getting done, not even with the election of Barack Obama. The interests are just too entrenched. Everybody stands to lose something, and contemporary American culture seems to have lost sight of any notion of the common good.
It’s a crazy scenario. There are American citizens, engineers and scientists, educated with American tax dollars, who now conduct their work in China or are employed by businesses that do the rest of their work there. In effect, United States tax dollars are educating the people whose work will ultimately benefit the Chinese!
Of course, these scientists and engineers are only working for the highest salaries. But the firms they work for – American firms, owned by American citizens – complain that they simply can’t do business here; they must go where the action is, and that’s China. To do anything else would be like trying to sell ice at the North Pole.

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• Fiona Harvey environment correspondent
• guardian.co.uk, Sunday 4 December 2011 19.41 GMT
• Article history

Turbines on Burgar Hill, Orkney, Scotland, wind power represents biggest share of UK’s renewable energy sector. Photograph Doug Houghton/Alamy

The construction of new renewable energy generation capacity has fallen dramatically, as the big six energy suppliers pursue a “dash for gas” policy that could put the UK’s climate change targets out of reach and leave households with higher bills.

The number of new wind turbines built this year is down by half on last year. To date, 540MW worth of new turbines, on land and offshore, have been built this year – 200 onshore and 50 offshore turbines. Across the UK last year, 1,192MW of wind capacity was added.

The pipeline of new projects has also stagnated – this year, 2,058MW of windfarms were submitted for planning permission, compared with 2,080MW in 2010, and the number approved dropped markedly, from 1,366MW in 2010 to 920MW, according to figures from industry body RenewableUK.

This contrasts with the 30GW of new gas-fired power stations that are at planning stage. These will require tens of billions of pounds of investment, coming mostly from the big six energy suppliers.

Although gas is cheaper than renewables at present, the cost of renewables is steadily coming down, and over-reliance on gas is one of the key factors behind high energy bills, according to the government. About 60% of rises in the past year have been the result of the higher cost of fuel imports.

In 2010, the total investment in renewable energy in the UK fell dramatically, from $11bn (£7bn) to less than $3bn – a drop of about 70%, according to Roland Berger, the consultancy. This year, the investment has recovered somewhat, after about $6bn was invested in offshore wind, but this is still well down on 2009 figures – despite the government’s pledges to expand the renewable energy sector, with a target of 18GW of generating capacity to come from offshore wind by 2020. At least £200bn will be needed this decade to transform the UK’s energy sector to a low-carbon footing, but there is little sign yet of investment on that scale.

Last week construction group Carillion said 4,500 jobs are at risk as a result of a government decision to cut solar energy subsidies. There are 39,000 jobs dependent on the solar energy sector and thousands more are also at risk.

Manfred Hader, a partner at Roland Berger, said: “More regulatory clarity and the making available of large amounts of capital are necessary to drive government targets for offshore wind. There will be a need to bridge the gap between funding via traditional sources such as utilities and banks and the total investment required – it is a moot point as to whether institutional investors would be interested and whether the green investment bank would make a real difference to this issue.”

Wind represents the biggest share of the UK’s renewable energy mix, but other forms of renewable energy have also been set back. Solar power companies are set to cut thousands of jobs, as the government abruptly halved the subsidies available for solar panels. The biomass sector has suffered, too, as several proposed new biomass power stations, burning waste, energy crops or straw, have been delayed. Drax, which operates the biggest UK coal-fired power station, has put on hold plans for two new straw-burning biomass plants.

While renewables struggle, gas has seen a flurry of interest from the big six suppliers. Over the past few years, plans for at least 30GW of gas-fired power have been brought forward, which would lead to a rash of new power stations across the country, with some now in construction but most still in the planning stages.

Gas businesses have also been lobbying heavily to be seen as a “green” fuel, because burning gas produces about half the carbon dioxide of burning coal. However, gas lobbyists also have the renewables industry in their sights, as the Guardian has revealed, with behind-the-scenes meetings with key political figures across Europe and the publication of a report which took McKinsey research showing renewables could power a low-carbon Europe and re-interpreted it as an argument that opting for gas would be cheaper than pushing renewable energy.

Chris Huhne, secretary of state for energy and climate change, invited the construction of new gas-fired power stations with a promise that a new “emissions performance standard” would be set at a rate that favoured gas but blocked new coal-fired power. He promised this new regulation would not be reviewed until 2015, and any revision would not be retroactive, giving gas companies a clear window for investment.

Huhne’s comments made clear one of the reasons behind the government’s encouragement of new gas-fired power – that new gas power stations take only about 18 months to build. Ministers are concerned that as many of the older coal-fired power stations are taken out of service in the next few years, there could be an “energy gap” between demand for electricity and supply. As putting up new gas-fired power stations is quick compared with wind turbines or nuclear reactors, gas is now the favoured option if ministers fear there is any likelihood of suppliers failing to “keep the lights on”.

Burning gas produces about half the carbon dioxide of coal so switching from coal to gas has helped the UK to one of the most impressive emissions-cutting records of any country over the past 20 years. There were no gas-fired power stations in 1990, but the rapid expansion of the sector driven by the Conservative government, under Margaret Thatcher, was the biggest single factor behind the 25% cut in the UK’s greenhouse gas emissions between 1990 and 2010.

The government’s new carbon plan – published on December 1 – showed a further switch away from the UK’s remaining coal-fired power stations, many of which will be taken out of service in the next few years, is a major factor in enabling the government to promised 34% emissions cuts compared with 1990 levels by 2022. Between 40 and 70GW of new capacity will be needed to meet the UK’s carbon targets. Huhne said: “The energy mix will depend on what happens in the world gas markets. If there is a low gas price in the UK, then you will see more gas and carbon capture and storage and less renewable energy and nuclear [power].”

There are risks to a dependence on gas, however. High prices in world markets have been the main cause of energy bill rises and as demand increases this is likely to continue. Huhne has said the UK needs to give up its “addiction to fossil fuels” but on current plans gas looks a clear winner from government energy policies, with the outlook for renewables less certain.

David Nickols, managing director at the consultancy WSP Future Energy said project finance for major renewables projects looked difficult, and planning restrictions were also “major obstacle”.

Paul Sloman, a partner at Roland Berger Strategy Consultants, warned: “The UK cannot afford to be reliant mainly on gas-fired generation as energy security is also a very pertinent issue and increasing reliance on gas is not the solution, particularly as the UK’s own gas production from the North Sea declines.”

• This article was amended on 6 December to change the number of turbines in the second paragraph from 400 to 250.

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