The Alternative Green Energy Thread

thevilla

Netexporter said:

Yes, it's been over 16GW since I first checked earlier this morning. Sadly, burning coal to make up for lack of sunshine, though

That coal could just as easily be gas.  While coal is retained it has to be allowed some revenue sometime.  If lack of solar was an issue we'd probably be exporting less to Europe and Ireland.

Netexporter

If lack of solar was an issue we'd probably be exporting less to Europe and Ireland.

I wasn't referring to installed capacity, just the tiny amount being produced at the time I quoted.

Interconnectors are an interesting subject. I've often observed what might be called counterintuitive flows, in both directions. I imagine the negotiations as to what takes highest priority in the needs of various countries to balance their supply/demand, to maintain frequency, and to be able to "dump" load, rather than having to pay generators to constrain output, must be quite complex.

thevilla

Netexporter said:

If lack of solar was an issue we'd probably be exporting less to Europe and Ireland.

I wasn't referring to installed capacity, just the tiny amount being produced at the time I quoted.

Agreed.  I notice some people seem to conclude that because we're burning coal we must be at a state of last resort and the lights are about to go out

JKenH

Many of you will have read today of the $7trn of subsidies given to fossil fuels. I was interested to see just what this figure involves. I haven’t found a detailed breakdown but the article from Forbes (excerpts below) helps explain the difference between explicit and implicit subsidies. It seems what counts as a fossil fuel subsidy doesn’t necessarily involve writing large cheques to keep oil companies afloat as one might expect. 

Explicit subsidies can include something as innocuous and well meaning as the Energy Price Guarantee we enjoyed last winter. (As usual, folk are happy to quietly take advantage of these subsidies while at the same time protesting they shouldn’t be allowed). I somehow doubt that all the taxes raised on fossil fuel use by road transport or in VAT on our fuel bills are added back into the equation to produce a net figure.

Implicit subsidies have a much wider scope focussing on negative “externalities” of burning fossil fuels. It seems uncharitable however to consider negative externalities without also considering positive externalities (for instance the number of deaths avoided because the old and infirm are able to keep warm in their homes in winter) but that unfortunately is how the IMF’s one sided accounting works. 

Energy Subsidy Shenanigans: The Green IMF At Work

The fossil fuel subsidies identified by the IMF in its 2023 Update on Fossil Fuel Subsidies Data refer to “explicit” and “implicit” subsidies. The former refers to undercharging for observable supply costs of fossil fuels while the latter refers to undercharging implied by not taking into account the hypothesized costs of global warming and local air pollution. The costs of global warming include the familiar litany of collapsing ice-sheets and rising sea-levels which inundate islands and low-lying coastlands, extreme weather, extinction of fauna and flora species, the spread of diseases, the collapse of agriculture and loss of food security. Local air pollution refers to the population health impacts of pollutants such as the oxides of sulfur and nitrogen, fine particulate matter and ground-level ozone.

Explicit subsidies (granting households or industry exemption from high market prices with price caps, grants or tax relief) have more than doubled since 2020 but are still only 18 percent of the total estimated subsidy. The jump in explicit subsidies have been particularly notable in Europe which faced high energy prices from late 2021 onwards as world energy demand recovered from the Covid lockdowns which were accentuated by the sanctions on Russian energy exports.

Implicit subsidies account for 82 percent of the total. These include the costs of undercharging for global warming and local air pollution caused by fossil fuel use as well as the foregone taxes that governments would have raked in with the higher recommended prices of coal, oil and natural gas. According to the IMF, differences between what it calls “efficient” prices and actual retail fuel prices are large and pervasive. For example, 80 percent of global coal consumption was priced at below half of its “efficient” level in 2022.

https://www.forbes.com/sites/tilakdoshi/2023/09/06/energy-subsidy-shenanigans-the-green-imf-at-work/

michaels

Informative.  I guess this is stuff like UK VAT on utilities being only 5% rather than 20% but of course it must be hard to avoid double counting (there is already carbon tax applied I believe) and as you mention, do they deduct already existing taxation such as fuel duty (which is liable to VAT!)

1961Nick

I fail to see how giving an energy subsidy to a household is subsidising the fossil fuel industry? The only beneficiaries are the consumer & the government.

michaels

1961Nick said:

I fail to see how giving an energy subsidy to a household is subsidising the fossil fuel industry? The only beneficiaries are the consumer & the government.

You probably didn't study economics

https://www.economicsonline.co.uk/competitive_markets/subsidies.html/

1961Nick

michaels said:

1961Nick said:

I fail to see how giving an energy subsidy to a household is subsidising the fossil fuel industry? The only beneficiaries are the consumer & the government.

You probably didn't study economics

https://www.economicsonline.co.uk/competitive_markets/subsidies.html/

Actually I did study economics.

The first paragraph of the linked article explains why this is not a subsidy as the money was clearly not to "encourage production & consumption". The money was given directly to households - deducting it from the energy bill was the easiest & most cost effective way of doing that in most cases.

A subsidy is an amount of money given directly to firms by the government to encourage production and consumption. A unit subsidy is a specific sum per unit produced which is given to the producer.

QrizB

1961Nick said:

michaels said:

1961Nick said:

I fail to see how giving an energy subsidy to a household is subsidising the fossil fuel industry? The only beneficiaries are the consumer & the government.

You probably didn't study economics

https://www.economicsonline.co.uk/competitive_markets/subsidies.html/

Actually I did study economics.

You'll be familiar with price elasticity of demand, then?

I don't know how elastic energy demand is, but you would expect making it cheaper (via the EPG) would increase consumption. This was the whole point, to ensure that Granny would be able to heat her house despite wholesale energy prices being unusually high.

1961Nick

QrizB said:

1961Nick said:

michaels said:

1961Nick said:

I fail to see how giving an energy subsidy to a household is subsidising the fossil fuel industry? The only beneficiaries are the consumer & the government.

You probably didn't study economics

https://www.economicsonline.co.uk/competitive_markets/subsidies.html/

Actually I did study economics.

You'll be familiar with price elasticity of demand, then?

I don't know how elastic energy demand is, but you would expect making it cheaper (via the EPG) would increase consumption. This was the whole point, to ensure that Granny would be able to heat her house despite wholesale energy prices being unusually high.

None of the traditional modelling works because demand for energy is very inelastic, prices are fixed, there's zero competition & the profit margin is dictated by the regulator.