Global Warming | Green World Investor

Bad Journalism on German Solar Subsidies Analysis – Why Media persistently gets it wrong

1 Feb, 2012

I continue to be surprised by bad and shallow analysis of renewable energy subsidies done by media. Most of it is due to bad research and lack of investigative and unbiased journalism. Writers with little or no background in energy or cleantech sensationalize an issue taking a report from some biased thinktank. Here is one example from a website called ironically Reason.com which you can read here http://reason.com/blog/2012/01/31/black-hole-sun-germany-spends-100-billio

What the writer is saying that Germany is spending massive amounts of subsidies to get little amount of power. What he has missed

1) He is not comparing the subsidies for solar with that of fossil fuels. Does he know that Fossil Fuel Subsidies globally amount to $550 billion a year which is many times more than that given to Solar, Wind and others.Even a developed country like Norway gives 5 times more subsidies to fossil fuels than renewable energy

Norway has been hailed as the toughest cutter of Greenhouse Gas Emissions amongst the developed countries promising to cut Carbon Emissions by 30-40% by 2020 from the 1990 Levels.Compared to this USA has promised a measly 17% cut from 2005 levels and the EU only 20% by 2020 from 1990 levels.Norway’s cost of cutting emissions is also quite huge $200 a tons of Carbon Dioxide.Norway has also promised to cut Carbon Emissions internally rather than buying cheap carbon credits from abroad using its massive sovereign fund.Note the Cap and Trade Kyoto Protocol has been criticized for being ineffectual in curbing Global Warming.However a NGO reveal today that Norway’s spending on Fossil Fuel Subsidies is $1.4 Billion annually which is 5 times more than on its Subsidy for Greener Forms of Energy.Note $550 Billion is spent worldwide on subsidizing Fossil Fuel Energy which is multiples of that spend on Renewable Energy.Norway is a major Oil Producer and its Huge Sovereign Fund of $450 Billion has been built mainly through Oil Revenues.Therefore the massive subsidies on Oil is not surprising though incompatible with its commitment towards Climate Change.

2) He says that 18 billion euros is the cost of solar energy over 20 years . He conveniently forgets/ does not know the basic concept of time value of money.

3) He does not consider the costs on health,pollution,mining deaths and other social costs of fossil fuel electricity. He forgets to mention the BP Oil Spill and Fukushima Disaster.

4) He says it is cheaper to do energy efficiency than solar energy , a fact that is well know but will energy efficiency alone solve our global warming problems. Nobody doubts the fact that energy efficiency is cheaper but you need renewable energy as well

Mainstream media is woefully inadequate in presenting the problems that we are faced with particularly in a topic as complex as climate change. Taking a report and presenting it without a balanced opinion makes it worse.

Germans are happy paying 10-15% extra for electricity Green and Clean Energy which would make a Better World. Most of the other developed countries like USA,Canada have shown only shocking apathy towards global warming . Which is better , it does not take a rocket scientist to figure it out. Germany has alone brought solar energy prices near grid parity due to its strong and pragmatic support to green energy .Though the FIT policy is not perfect it is much better than policies implemented elsewhere.

Read more on Pros and Cons of Renewable Energy here

Global Warming of 2 Degrees to Halve India’s Wheat Production to 40 Million Tons

1 Feb, 2012

Climate Change

In these days of economic crises it has become unsexy to talk about Global Warming and Climate Change which pose a much greater threat to mankind. The Western countries have turned apathetic towards climate change with most like Canada, USA and UK showing shocking attitude towards Global Warming . The reason is that rich countries can throw resources at ameliorating the affects of climate change . The poor countries have little in terms of resources to either slowdown climate change or change the attitude of the richer countries. South Asia and Africa two of the poorest regions in the world will face the worst of the global warming affects. A new study has indicated that India’s wheat yield could be halved to 40 million tons a year from the current 80 million tons due to rising temperature. The reason is that wheat yields will come down as temperature goes up by 2 degrees centigrade or more.

Extreme heat can accelerate wheat aging, an effect that reduces crop yields. The overall decline could be as much as 50 per cent with two degree increase in temperature and is way above than what has been anticipated in existing crop forecasting models.The new research implies that climate warming presents even greater challenges to wheat production in Punjab, Haryana, Uttar Pradesh and Bihar than current models predict.
The team comprising scientists from Stanford University and International Maize and Wheat Improvement Centre in Mexico studied the wheat growing regions of Indo-Gangetic plains with satellite data for nine years to pick up the signs of early maturity in wheat and compare it against rising temperature.

Climate Change has started happening already but like IPCC it is being ridiculed because there is no proof. Climate skeptics can use the complexity of the science of global warming as a weapon to disrepute the whole theory. But there is too much overwhelming series of facts like the hottest years in centuriers, ice sheets melting , ferocious storms to just say that we can’t say for sure.

Recently the weather conditions have become extreme in many parts of Asia and Europe.While the global temperatures this year are said to be the highest since records were kept,devastating climate conditions have affected different parts of the world.It reads straight out of an Global Warming Disaster 101.Global Wheat and Rice Prices have increaseddramatically as a Record Drought Affects Russia . China and Pakistan are seeing devastating floods which have displaced millions besides endangering the fragile Pakistani Economy.While the anti Climate Changers will say that it has nothing to do with human induced carbon emissions,there is still nothing to prove that it is not so.Doomsday scenarios projected by the end of the century if global temperatures increase by more than 2 Degrees Centigrade are playing out right now.

Rising Food Prices in India and elsewhere are already causing havoc with Food Riots, Hunger and Malnutrition. Hundreds of Millions in India go Hungry everyday without the Global Warming Affect. What would happen when Food Production falls in Halve is just too painful to analyze.

The recent weather catastrophe in different parts of the world has pushed up the food prices.The Russian Wheat Export Ban imposed earlier had exacerbated the situation with news coming of the ban being extended into 2011.The exponential increase in wheat price which had moderated earlier is starting to soar again.The rising food price has led to riots in the Maputo town in Mozambique where food prices were increased by25%.Food insecurity is raging in the poorest parts of the world amongst populations which are most vulnerable to slight increase in food prices.Wheat Prices have increased 74% in the last 3-4 months and other grain prices have moved up in sympathy as well.Food inflation is rearing its ugly head with India reporting double digit inflation in Food Prices.China has also sown increased wheat and port prices due to incessant flooding.Major Food importers like Bangladesh are increasing their imports of Rice as Wheat is expected to be in short supply.Animal Feedstock is being substituted with corn based products from wheat based products.This has led to a general rise in prices of all grains leading to worldwide distress.Major food producing and consuming countries like China and India are clamping down on exports of food items as it is every country on their own.Globalization of Agriculture has not proved to be more of a bane than boon as speculation in agri futures has led to a faster rise in food prices.The future of Food Security looks bleak with increasing population and affluence marching ahead of the food growth.

How Massive 1000 Megawatt Solar Energy Farms in Chinese Deserts will Boost 2012 Demand

16 Jan, 2012

China,Solar Panels

China add the most electricity capacity annually in the world at around 100 GW and its total electricity generation capacity is second only to the USA which it will surpass in the next few years. China is highly dependent on thermal power for its energy needs which is becoming scarce and expensive by the day. Not to speak of the big disadvantages of coal as a fuel which causes thousands of deaths each year. Solar Energy has now reached grid parity in many parts of the world thanks to the low cost cheap solar panels being made by Chinese solar panel producers. With many countries now thinking of putting an anti dumping duty on Chinese solar modules, the government is looking to boost domestic demand . Chinese solar panel Tier 1 players like LDK, Suntech, Trina and Yingli besides some others are the biggest beneficiaries of this new solar policy from China.

China is looking to set up massive 1000 MW solar energy farms in its desert regions of Qinghai, Mongolia ,Tibet and others .Some of these regions have the highest solar radiation in the world with over 2700 hours of sunshine. What this means is that solar power can be profitably be generated at 8c/ Kwh .Though higher than coal generate power , this price is constant for 30 years even as thermal, gas and other forms of fossil fuel will keep going up besides increasing carbon emissions. These massive 1000 MW farms can be now be built quickly as Chinese solar companies have massive capacity which can supply solar panels at a very cheap price of as low as 80c/ watt.

China raises Solar Energy Capacity Target to 50 GW from 20 GW in 2020

China’s Solar Panel Manufactures have enjoyed a massive boom phase though domestic solar electric capacity has failed to keep up.China has been rewriting its renewable energy plan in the wake of the Fukushima Nuclear Energy Disaster in Japan.Note there has been a strong global backlash against nuclear energy around the world and 7 nuclear plants in Germany have been closed all but in name.Other countries like South Korea,Italy,Switzerland are rethinking of what do about their nuclear reactors giving the massive tail risks with nuclear generation.China had a target of only 20 GW of solar by 2020 has decided to raise the target by 150% to 50 GW according to the country’s leading energy planning authority NDRC.Note China installed more than 15 GW of Wind Energy in 2010 alone becoming the world’s largest Wind Energy Market by far.Solar Energy strongly lags Wind in China despite China having the biggest solar panel manufacturing industry in the world.Its Golden Sun and other Solar Subsidy programs have been small in absolute terms compared to its huge electricity capacity.Note Wind Power in China has reached a saturation level with almost 18 GW installed in 2010 ,with such a high level further growth looks quite difficult.

3 Signs of Trouble for Chinese Wind Energy

1) Sinovel has canceled shipments of Electrical Control Systems (ECS) for its Wind Turbines from American Superconductor due to high inventory levels and refused past payments as well.With the biggest Manufacturer of Wind Turbines reporting inventory problems,the situation of the rest can’t be that good

2) The Chinese National Energy Bureau was considering tighter procedures that would include requiring local governments to get the written approval before going ahead with wind projects with installed capacity of less than 50 MW.Earlier it used to be more than 50 MW

3) Hundreds of Wind Turbines have not been connected to the Power Grid due to lack of capacity or transmission lines.China emphasises on investment without factoring in returns is one cause of these orphan wind turbines.

Qinhai to build 1 GW solar power plant

The government of Hainan Tibetan autonomous prefecture and GSF Capital signed amemorandum on Sunday, planning to build a 1-GW solar power base in this underdeveloped prefecture and bring abundant electricity for the local people.
The country plans to build solar power plants mainly in Tibet, Inner Mongolia, Ningxia,Gansu, Qinghai, Xinjiang and Yunan.

Why European Union might have to Rescind the Green Tax on Airlines as India,China and USA gang up

11 Jan, 2012

Climate Change

Europe which has been one of the greenest regions on earth in terms of promoting green energy and reducing carbon emissions is set to face a severe test. Europe is going to impose a Carbon Tax on Airlines flying into the region from 2012 . This has got the other major countries seeing red, with most of them planning retaliation. This Green Tax will add around $3 billion per year in terms of extra fees from airlines or around $6 per extra passenger. While airlines from USA and Canada approached the court, airlines from India and China are refusing to pay the tax outright. Indian airlines won’t supply their carbon data while China won’t pay the taxes . Note European Union is isolated in this fight against climate change . Though Carbon Trading is not a perfect system and open to abuses, at least it makes a pretense to fight global warming. On the other hand,these other countries have no plan or intention to fight climate change.

With global public opinion focused on the economic crisis , governments don’t care a hoot for a problem that is a decade away . So instead of enacting some policies to reduce carbon emissions from airlines which is around 3% of the carbon emissions or around 300 million tons, they want to browbeat the European Union.

Why European Union might have to Rescind the Green Tax

1) Retaliation by other countries on European Airlines like putting up overflight fees

2) Action against the European Airline Industry (Airbus), if countries like India and China prefer Boeing for their aircraft orders

3) Flights will be diverted away from Europe to avoid the Green Tax. The main beneficiaries will be Emirates, Ethihad over Lufthanse and British Airways on transworld flights

4) Ruling against European Union in international courts against violation of international airline treaties

EU stops the Free Carbon Lunch – Airline Prices to Increase to factor in Carbon Emissions

Airline Ticket Prices are set to go up as European Union implements its ETS Scheme on the Airline Industry from 2012.Note EU as a region has been one of the most active players in the climate change arena and has an active carbon emissions market.Though this market has encouraged fraud and profiteering by unscrupulous players making it a good target for the fossil fuel lobby,the principle to fight against global warming is a good one.Compare that to USA,Canada and Japan who have done nothing to fight climate change despite the wealth of these nations.Canada has been guilty of abandoning the Kyoto Plan after missing its previous target.It has faced no penalties as it is not legally enforceable.The country continues down the pollute as much as you can pushing oil extraction from tar sands which is much more dangerous to the environment than normal oil drilling.

Europe’s Doomed Flight of Decarbonizing Fancy

The decision to include the airlines – responsible for just 3 percent of global CO2 emissions – in the EU cap-and-trade scheme came in the wake of the failure to agree a global agreement. While airlines will only pay for 15 percent of their emission allowances in 2012, around €256 at current market prices, from 2013 they will have to pay 18 percent. The airline industry estimates the cost over the first 8 years will be in the region of €17 billion ($23.8 billion). Although the carbon pollution bill kicked-in on January 1, 2012, invoices will not be sent to airlines until 2013; which is why non-EU governments are considering their next moves carefully.

At the heart of the “legal options” for the airline lawyers is the international agreement regulating air commerce known as the Chicago Accords. More prosaically known as the Chicago Convention on International Civil Aviation, its opening section specifically states, “The contracting states recognize that every state has complete and exclusive sovereignty over the airspace above its territory.” The new EU carbon regulations clearly violate the terms of this agreement by seeking to regulate air flight above nations outside Europe.

Offshore Wind Energy gets hit by European Debt Crisis

11 Jan, 2012

Offshore Wind

Europe has got the largest installed capacity of wind and solar energy due to the proactive policies enacted by the governments there.However the renewable energy industries have not been left unaffected by the European debt crisis. Offshore Wind Energy is a European development with most of the major offshore wind power farms located in Germany and UK. France which is tendering for 5 GW of offshore wind energy farms has seen reduced bank interest according to Areva. Offshore Wind Energy grew by more than 50% in 2010 and is expected to continue at above 50% growth rates over the next several years as the global installed offshore wind capacity multiples by more than 25 times over the next 10 years.

Banks reluctant to invest in Expensive Offshore Wind Farms

Offshore Wind Farms cost a bomb in terms of initial capital investment with around $5 million per Megawatt compared to less than $2 million for an onshore wind farm. Debt is a big component of this capex and every developer requires a consortium of banks to help with the financing.

France, which has no offshore wind power yet, proposes to install 6,000 megawat by 2020 . Bids for the first round of five zones with a combined capacity of 3,000 megawatts will require about 10 billion euros of investment .Areva is the biggest nuclear equipment company in the world is a part of one of the consortium bidding for this project.Note out of the 10 billion euros in investment around 8 billion euros will have to be debt.

Offshore Wind Farm Developers

Before we look at the major developers here is a very good interactive map of major global offshore wind farms from 4coffshore . Note Europe is leading in offshore wind energy so it is not a surprise that most of the big devlopers are giant European utilities.

Centrica - Centrica is a British company that was formed in 1997 after the demerger from British Gas.The company has a number of energy projects which it owns and operates.Centrica is involved in the operation and building of a number of offshore wind farms like Barrow etc.
DONG Energy is one of the leading energy groups in Northern Europe headquartered in Denmark.They have 1,035 MW of on- and offshore wind power in operation and 1,316 MW under construction.They are the top wind farm developers along with Vattenfall and E.ON.Dong has built the Barbo Flat,Gunfleet and Barrow offshore wind farms.They are also building the London Array and Walney Offshore Projects in the UK which will take their offshore wind portfolio to over 1 GW in the near future.
Airtricity – This Irish Gas and Electricity Utility has won a couple of contracts to build big offshore wind farms in Scotland in Crown Estate bidding Round 2.
EDF Group is one of the biggest power utilities in Europe and one of the biggest operators of nuclear power in the world.The company is also the largest producer of power in the UK which has the strongest growth plans in offshore wind energy.The company has won contracts to build offshore wind energy installations in UK
ScottishPower Renewables is part of Iberdrola Renovables, the world’s largest developer of renewable energy based out of Spain.They are UK’s leading developer of onshore wind, with over 30 windfarms fully operational, under construction or in planning.
E.ON the German powerhouse is one of the world’s largest power and gas companies.with EUR93 billion in sales in 2010.The company is developing offshore wind farms in Germany and UK.It has a long experience in operating wind farms as well.
RWE is another major German utility that is developing big offshore wind farms in Europe taking advantage its expertise after oeprating a large portfolio of land based wind farms.
Vattenfall - It is a Swedish company and one of Europe’s largest utilities.Vattenfall operates close to 900 wind power turbines in Sweden, Denmark, Germany, Poland, the Netherlands, Belgium and the UK. The world’s largest offshore wind farm, Thanet Wind Farm off the coast of the UK, came into operation in September 2010. In partnership with Scottish Power Renewables, Vattenfall has also been awarded one of the zones in the UK’s Round Three for the development of offshore wind power.
SeaEnergy PLC (formerly Ramco Energy plc) is the UK’s only quoted pure play offshore wind development company. Based in Aberdeen, Scotland.SeaEnergy PLC, through its 80% subsidiary SeaEnergy Renewables Limited, has interests in three UK offshore wind farm sites,Beatrice in a joint venture with SSE Renewables, Moray Firth with EDPR and Inch Cape. The Group has also signed a heads of terms agreement to access offshore wind farm projects in Taiwan.

Coal Stealing on Unprecedented Scale by Indian Mafia contributes to Indian Power Woes

9 Jan, 2012

Coal,Energy,Fossil Fuels

Coal Stealing and Pilferage by the Coal Mafia has always been done on a massive multi million dollar scale. In the coal rich states of Jharkhand, Bihar, West Bengal and Chattisgarh, Stealing of Coal is a major illegal industry. Everyone knows about it and nothing is done as most officials and politicians get a cut of the illegal gains. Corruption in India is institutionalized as governing bodies remain weak and powerless. Despite India’s much touted growth story,all these needling problems have contributed towards the Indian GDP slowing down sharply. Unless governance is improved,its tough to see how India can achieve its potential.

Dreaded Dons openly operate and steal millions of dollars in coal every day in the Indian coal districts. Coal India which is the state owned monopoly producer of coal has openly acknowledged the fact.India is facing a power crisis due to inadequate production of coal and the Coal Stealing is contributing. Note the Uses of Coal are more than just power and this stolen coal is diversified and sold to these companies. There are a number of small private companies who buy this illegal coal at lower than market prices. In fact the entire business model of some of these smaller cement,steel companies is built on pilfered coal.

Not only Coal,but other Fossil Fuels like Petrol, Diesel and Gas also have related Mafias stealing and making billions out of their illegal trade. These Mafias are so powerful that they think nothing of killing honest government officials who take them on.

India’s Fossil Fuel Subsidies have led to a massive growth of the petrol and diesel mafia in the country.India gives subsidies on diesel,kerosene and cooking gas through its state owned petro/gas companies like BPCL,IOCL,HPCL etc.These subsidies have been given for a long time and have led to the growth of a parallel black economy in these products.They not only lead to capital misallocation but also to the massive illegal profits for a few.It is a well known fact that all petroleum pump owners adulterate petroleum ( which power most of the cars) with subsdized diesel and kerosene.This massive racket earns millions of dollars (if not billions) for a network of company officials,pump owners,government bureaucrats and politicians.The mafia is so strong and powerful that it thinks nothing of burning alive a senior police official.The racketeers are so rich and well connected that despite common knowledge nothing gets done about it.

List of major Indian Coal Companies

1) Coal India Limited (CIL)- The State Owned Giant Coal Producer dwarfs the other companies through its sheer size,scale,cost and reach.The company has fared poorly in the current year after its IPO as its production growth has almost come to Zero.However its sells coal at such a low cost,that it could easily raise prices of coal in select categories to meet its financial goals.One of the safest investments in the stock market.It posseses high level of cash,low valuation compared to global peers and has a huge room to raise coal prices in the future.

2) Neyveli Lignite Corporation is a PSU like NTPC and is also involved in lignite mining company in India. The company is mainly based out of the southern state of Tamil Nadu and mines some 24 million ton of lignite per year with an installed capacity of 2490 MW

3) Singareni Collieries Company Limited (SCCL) is a PSU jointly owned by Andhra Pradesh and the Federal Governm .The company is involved in mining coal in the GodavariValley region, with reserves of around 8 Billion Tons with production of around 50 million tons a year.Note listed currently still one of the major coal companies in India.