Developing Asia’s love affair with coal

Energy precedes development, not vice versa. Developing countries cannot sustain growth without cheap and stable energy supply.

I am reposting some recent reports about efforts by many developing Asian countries to grow fast via cheaper energy from coal power. Enjoy.
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“Pakistan’s Water and Power Ministry… investment project with China, it’s committed to spending $15 billion on as many as 12 new coal power plants over the next 15 years…

To anyone who would criticize the move, Piyush Goyal, India’s power minister, had this to say: “India is not a polluter,” he told the Financial Times. “It’s America and the western world that has to first stop polluting.” There’s a grain of truth to that: America and Europe did a lot of coal burning during their development, and now have strong economies to leverage in order to clean up their acts.” – May 3, 2017, https://www.technologyreview.com/s/604323/india-and-pakistans-continued-love-affair-with-coal/

“$54 billion China Pakistan Economic Corridor (CPEC), which includes spending of about $33 billion on a total of 19 energy projects, including coal-fired and renewable power plants, transmission lines, and other infrastructure.

Combined, the projects will eventually generate 16,000 megawatts (MW) of electricity, which the government says is urgently needed. About three-quarters of the newly generated power will come from coal-powered plants, and the government insists that these will be fitted with the latest technology to reduce pollution and climate-changing emissions.” – May 2, 2017, http://www.reuters.com/article/us-pakistan-energy-coal-idUSKBN17Z019

“China’s production of electricity from coal stayed at elevated levels post the northern hemisphere winter after reaching a high of 423.6 billion kWh in December – and the highest level recorded based on available data going back to January 2010.

And electricity production from coal in March 2017 rebounded strongly following the Lunar New Year lull in February, rising 7.7% year on year to 396.1 billion kWh, according to the National Bureau of Statistics data.” – May 2, 2017, http://blogs.platts.com/2017/05/02/china-coal-fired-power-generation-surprises-naysayers/

“India is heavily reliant on coal for its electricity, more than three-quarters of which was generated by its 132 coal-fired power stations in 2014-15, according to the most recent data from the central electricity authority. However, while it is the world’s third-biggest emitter of greenhouse gases in absolute terms, its per capita emissions are a fraction of many other nations’, at just 1.59 metric tonnes a year, compared with 7.55 for China and 16.39 for the US.” – May 3, 2017, https://www.ft.com/content/18268438-2e3e-11e7-9555-23ef563ecf9a

“A MoneySuperMarket report listed Mozambique, Ethiopia and Zimbabwe as having “the most environmentally friendly people in the world,” while ranking Americans as being some of the least eco-friendly people on the planet. That may not be a bad thing, though, given the greenest countries also tend to be poor and run by authoritarian regimes.” – April 22, 2017, http://dailycaller.com/2017/04/22/worlds-greenest-people-live-in-ridiculously-poor-authoritarian-regimes-graph/

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“America was built on cheap and abundant coal. Fossil fuels powered the U.S. into the industrial age and replaced inefficient windmills and woodburning as the primary sources of electricity. America currently has access to 500 years’ worth of coal — far more than any other nation. Even despite the last decade’s war on coal during the Obama years, the U.S. still derives about one third of our power from coal — second only to natural gas.” – April 17, 2017, https://spectator.org/coals-colossal-comeback/

“China’s fundamental demand for coal and natural gas has improved alongside better-than-expected economic growth in the first quarter,” Tian Miao, an analyst at North Square Blue Oak Ltd. in Beijing, said by phone. “The government’s investment in infrastructure has boosted power consumption while the move to replace coal with gas to fight pollution is also gaining some traction for gas demand.” – April 17, 2017, https://www.bloomberg.com/news/articles/2017-04-17/china-coal-production-rises-as-government-avoids-output-limits

“Coal conversion has become profitable in China because of an unusual combination of low coal prices relative to state-set gas or petrol prices.  Coal-to-liquids projects normally make economic sense only when oil prices are high or supply is limited. The technology was first developed in Nazi Germany, and commercialised in apartheid-era South Africa.” https://www.ft.com/content/02931290-1d94-11e7-a454-ab04428977f9

“despite a huge workforce of almost 400,000 solar workers (about 20 percent of electric power payrolls in 2016), that sector produced an insignificant share, less than 1 percent, of the electric power generated in the United States last year (EIA data here).

coal3In contrast, it took about the same number of natural gas workers (398,235) last year to produce more than one-third of U.S. electric power, or 37 times more electricity than solar’s minuscule share of 0.90 percent. And with only 160,000 coal workers (less than half the number of workers in either solar or gas), that sector produced nearly one-third (almost as much as gas) of U.S. electricity last year.” – May 3, 2017, http://www.washingtonexaminer.com/todays-most-productive-energy-workers-are-in-coal-and-gas-not-solar/article/2622029

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“According to a recent International Energy Agency (IEA) report, Japan’s 600 MW Isogo plant in Yokohama is probably the best in the world. It is an ultra-supercritical HELE plant, with emission levels comparable to a natural gas combined cycle (NGCC) power plant.” — April 18, 2017, https://dddusmma.wordpress.com/2017/04/18/japan-and-china-remarkably-clean-coal/

“The Petra Nova carbon capture system was installed in the W.A. Parish generation station. This is the largest and cleanest fossil fuel generaton station in the United States.” — April 18, 2017, https://wattsupwiththat.com/2017/04/18/clean-coal-carbon-capture-and-enhanced-oil-recovery/

India’s “plans to build nearly 370 coal-fired power plants… The construction of 65 gigawatts worth of coal-burning generation with an additional 178 gigawatts in the planning stages would make it nearly impossible for India to meet those climate promises, the researchers say.” — April 25, 2017, https://wattsupwiththat.com/2017/04/25/india-wont-be-able-to-meet-paris-climate-agreement-commitments-due-to-expanding-coal-power-plants/

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Two other useful sources here,

  1. http://www.jcoal.or.jp/eng/
  2. GWPF, “THE PARIS AGREEMENT and the Fifth Carbon Budget” by David Campbell, http://www.thegwpf.org/content/uploads/2016/09/Campbell.pdf  (13 pages long)

Bottomline: more environmentalism, more UN, more government renewables cronyism are bad for developing economies that want cheaper energy for them to develop faster and sustain growth.

Economic and energy policies of the Duterte administration

* This is my article in BusinessWorld last October 07, 2016.

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The new administration of President Rodrigo Duterte will turn 100 days old this week. The basis for its assessment is still sketchy and raw, so one way to further assess it later is to see some baseline figures when it assumed office.

Stratbase-Albert del Rosario Institute (ADRi) conducted a forum last Sept. 28 on “Raising the Next Tiger: The New Administration’s Economic Priorities” at The Tower Club in Makati. The main speakers were Mr. Aekapol Chongvilaivan, Country Economist, Philippines Country Office, Asian Development Bank (ADB); Department of Budget and Management (DBM) Secretary Ben Diokno; and Bangko Sentral ng Pilipinas (BSP) Deputy Governor for Monetary Stability Sector, Diwa Guinigundo.

The various reactors and discussants included Mr. George Barcelon, president of the Philippine Chamber of Commerce and Industry (PCCI); Mr. Calixto Chikiamco, president of the Foundation for Economic Freedom (FEF); Ambassador Donald Dee, president of the Employers Confederation of the Philippines (ECOP); and Mr. George Chua, president of the Financial Executives of the Philippines (FINEX).

These four reactors particularly mentioned the high prices and limited capacity of the Philippine’s energy sector. They pointed out that this factor, among others, reduces the country’s competitiveness compared to our ASEAN neighbors. Mr. Chikiamco and Mr. Chua in particular mentioned the problem of pushing more renewables wind and solar into the national grid as contributing to rising electricity prices and even affecting the grid stability.

Below are some numbers presented during the forum. I added the data on electricity generation (in terawatt hours) to further contextualize the points made by the four mentioned discussants (see Table 1).

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Sec. Diokno did not give comparative data for some ASEAN countries, only the Philippines’ fiscal data. He only emphasized the bigger focus of Duterte administration to expand and improve the country’s infrastructure to address the Philippines’ low rank in global competitiveness surveys.

Public spending by the national government for infrastructure are as follows: P165B in 2010, P175B in 2011, P216B in 2012, P307B in 2013, P346B in 2014, P576B in 2015, P756B in 2016, and P861B proposed in 2017. These numbers indicate a sustained increase in infrastructure spending from 2015 until next year.

So as baseline data: First, the Philippine economy has been growing rather fast until 2015 and the challenge is how to sustain this expansion. Second, overall global competitiveness is good enough but ranking in infrastructure quality is low. And third, growth of our power generation remained low, only 46% after one decade. In contrast, Indonesia’s power capacity has expanded nearly twice after a decade while Vietnam’s has expanded more than three times.

The big challenge therefore is to allocate more public resources for infrastructure development.

To get the additional funds, the new government will have to discontinue — or at least significantly cut the budgets — of some programs and projects that have questionable impact on poverty alleviation. These funds should then be reallocated to help bankroll more infrastructure projects.

Second, attract more private players and investors in coal and natural gas power generation, in road tollways, in seaports and airports, in rail-based urban transportation. This process is non-burdensome to taxpayers because these public goods are funded via user-pay principle.

For instance, only those who regularly use NLEx and SLEx pay for the capital expenditure and maintenance of those roads, not taxpayers who live far away who hardly ever use these roads.

It is also good that the President has explicitly declared that we cannot turn our back in using cheaper and stable energy from fossil fuels like coal and natural because of our fast rising energy demand that require 24/7 power. It is not possible to sustain fast growth without cheaper and stable electricity supply. Energy precedes economic development, it is not vice versa.

In the presentation by Mr. Guinigundo, he showed important reform measures from 1993 to 2016. I will show here some, especially those referring to enhancing more economic competition, liberalization and deregulation (see Table 2).

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If we remove the uncertainties of murders and disrespect for due process related to the ongoing “war on drugs,” the Duterte administration is starting on good and relatively stable macroeconomic platform. It just needs to sustain the momentum while hastening development and expansion of public infrastructure, especially in roads and energy.

Eliminate red tape in the energy sector

* This is my article in BusinessWorld last September 15, 2016.

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Which is more realistic and beneficial for consumers in reducing energy prices: removing the VAT (value-added tax) on electricity or removing the red tape and bureaucracy that stall construction of new power plants which will increase competition among players?

This is the question that Dr. Ramon Clarete, faculty member, former Dean of the UP School of Economics (UPSE) and Fellow of the Energy Policy Development Program (EPDP), tried to answer during the EPDP lecture last week at UPSE.

Dr. Clarete made various simulations and his econometric analysis showed the following:

If VAT is removed, tax collection (2009 to 2021) goes down by 3.4% of total or P212B or P16.3B/year.

If VAT is retained but red tape is eliminated, tax revenues increase by P21.9B or P1.7B/year.

If red tape and VAT are out, the economy loses revenues P197.7B or P15.2B/year.

Conclusion: Better eliminate red tape and unnecessary bureaucracies involved in issuing energy permits than abolish VAT on electricity. And electricity consumers will be better off with lower prices.

The paper is still undergoing further revisions. Once finalized, EPDP will publish it on its Web site.

I support the recommendation for two reasons.

One, for the rule of law to be more effective and respectable, a tax or subsidy should apply to all sectors, no exemption. Thus, it is wrong to impose VAT on food, clothing, and medicine purchases but not on electricity and other goods and services.

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Second, government has been expanding all these years such that its seeming purpose has been to further entrench and expand itself, endlessly. So instead of two or three agencies giving business permits, there are now 15 to 30 agencies involved; and instead of just one or two permits and signatures per agency, there are now three or more permits per agency.

How bad is the situation in the Philippines’ energy sector? Here is one such study covering the hydro power sector.

Under the Duterte administration, there are now moves by the Departments of Energy and Finance and other agencies to reduce the 160 or so government permits which take energy companies five years to comply with. Hopefully this can be reduced to at most 50 permits and require at most two years to comply with.

The problem with government is that for every regulation that it can shrink or abolish, it also creates two or more new regulations.

In the energy sector, there is a new DENR order that new coal power plants being proposed will also require getting the approval of the Climate Change Commission (CCC).

This doesn’t bode well because for the CCC, coal power is tantamount to an evil-demon resource that should be controlled and disallowed whenever possible, and only new renewables like wind and solar should be allowed with various subsidies and price guarantee for two decades.

This thinking is highly faulty and anomalous because coal power remains among the cheapest and most reliable energy sources worldwide. Blackouts and darkness have many social and economic costs to the people. There are more robberies, rape, murders and other crimes, more road accidents if streets are dark at night.

See the comparative levelized cost of electricity (LCOE) per energy resource in the US based on a recent study by the Institute for Energy Research (IER) last July. They used the US government’s Energy Information Administration (EIA) assumption for 2020 capacity factor to derive the numbers.

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So the cost per kWh of coal and natural gas — two important fossil fuel sources — is only about 1/3 the cost of wind and solar. Plus the fact that coal and gas are reliable, available 24/7 except under maintenance shutdown, and dispatchable upon demand changes (increase or decrease).

The lobbying of certain sectors to discontinue the use of coal power in the Philippines before the end of their economic lives, and that any new energy demand should be supplied only by the intermittent sources, is unwise and dangerous.

The Philippines used 82.6 terawatt hours or 82.6 billion kilowatt hours of electricity in 2015.

If all of this were generated from solar PV power plants and if the cost is the same as the US where solar price is 10 cents or P4.70 (at P47/$) per kWh more expensive than coal, then Philippine-based consumers should have paid P388B (= 82.6B kWh x P4.70/kWh extra cost) in extra cost or more expensive electricity in 2015.

If divided among the 101 million Filipinos that year, this means that each Filipino, newly-born babies and oldies alike, would have paid an additional P3,843 per head, on top of what they paid in electricity consumption in 2015.

Expensive electricity is simply wrong. Intermittent, weather-dependent and unreliable electricity supply makes it doubly wrong. Government should step back from more bureaucracies, more regulations of new power capacity additions. And more importantly, government should step back from favoritism and cronyism of expensive, unreliable renewables like wind and solar.
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Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers, a Fellow of SEANET and Stratbase-ADRi.

* This is my article in SPARK by ADRi last July 4, 2016.

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The emergence of a first ever President of the Philippines coming from Mindanao has produced ample business opportunities to that big island and its many provinces in the south. After the elections last month for instance, Davao City in particular experienced huge boost in business and tourism.

Overcoming energy poverty or insufficient supply of power and electricity for the people should be among the priorities of the new government. For instance, our average electricity consumption of 672 kWh per capita in 2012 was lower than that of Indonesia, nearly ½ that of Vietnam, nearly ¼ that of Thailand, nearly 1/7 that of Malaysia and almost 1/12 that of Singapore.

There are no comparative data for 2015 so this paper makes its computation, shown in the last column in this table below.

Table 1. Electric power consumption (kWh per capita)

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Sources: Columns 2-5: WB, World Development Indicators,http://data.worldbank.org/indicator/EG.USE.ELEC.KH.PC;
Columns 6-7: BP, Statistical Review of World Energy, June 2016;
Column 8: IMF, World Economic Outlook, April 2016;
Column 9: computation by this paper

Estimating energy poverty in Mindanao

The combined population of regions 9 to 13 plus ARMM in the census August 2015 was 24.136 million (source: Philippine Statistics Authority (PSA)). Gross electricity generation in Mindanao in 2015 was 9,282 GWh (source: DOE)

This means that average electricity consumption in Mindanao last year was only 384.6 kWh per capita. This is less than half that of the national average of 809 kWh per capita, and this may be equivalent to that of Cambodia (207 kWh per capita in 2012).

Existing capacity in Mindanao, 2015

As of 2015, Mindanao grid has a total installed capacity of 2,414 MW. The major energy sources are hydro (44%), oil-based (33%) and coal (16%). Geothermal, biomass and solar constitute the remaining 7%.

In terms of actual power generation in 2015, the 17 generating companies (gencos) and 39 distribution utilities (DUs) in Mindanao has produced and distributed 9,282 GWh of electricity, mainly coming from hydro (39%), oil-based (33%) and coal (20%). Geothermal contributed 8% while biomass and solar contribution was negligible.

Capacity addition in Mindanao, 2016-2019

The biggest addition was Therma South Inc. (TSI) of Aboitiz Power with 300 MW. Unit 1 (150 MW) started operation in September 2015 while Unit 2 (also 150 MW) began operation in January 2016.

Coming this year will be Saranggani (by Alsons), San Miguel Davao (by SMEC) and FDC (by Filinvest), all coal plants. Next year, GN Power will further add a huge coal power plant.

Table 2. Committed Power Projects in Mindanao, 2016-2019, as of May 2016

m2Source: DOE.

These will result in temporary power oversupply by 2017 and significantly raise the kWh per capita use in Mindanao. But such oversupply will be short-term because demand will simply adjust and rise quickly. Again, note the low per capita electricity consumption in Mindanao compared to the national average, and much lower compared to those in Vietnam, Thailand, Malaysia and other developed Asian economies.

Here are the indicative projects for Mindanao grid. Coal plants will still dominate the field. Once the Wholesale Electricity Spot Market (WESM) operates in Mindanao, it will be a dynamic market for both power producers and consumers.

Table 3. Indicative Power Projects in Mindanao, 2016-2021, as of May 2016

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With these initiatives at big power addition in Mindanao, among the policy measures that needed to be put in place are the following.

One, ensure the transmission link between the Mindanao and Visayas grids soon. This will significantly complement WESM operation in Mindanao.

Two, do not reverse many coal capacity additions with anti-coal pronouncements that might possibly come from the DENR and the Climate Change Commission (CCC). Check again table 1 above, the Philippines’ coal consumption even until 2015 is small compared to the coal capacity of our neighbors in the region.

Three, renewable energy development in Mindanao should focus on hydro power, development of new ones and rehabilitation and capacity expansion of existing ones under PSALM, and less on new renewables like wind and solar that require huge FIT allowance and more expensive electricity.

The stance of the new DENR Secretary against mining has an indirect adverse impact against coal power plants. The worst that can happen is a stop in granting DENR’s environmental clearance certificate (ECC) for new coal plants while a mild version is to further bureaucratize and delay for years the granting of ECC and various environmental permits. Both actions will adversely affect power development in the country and prolong energy poverty. This should not happen.

With six years in power of the first Mindanaoan President of the Philippines, the looming finalization of peace agreement with the MILF and even with the CPP-NPA, business expansion under the ASEAN Economic Community (AEC) and the 16-nations Regional Comprehensive Economic Partnership (RCCEP), and continued destabilization in many Muslim countries in the Middle East, many big investments and businesses will be coming to Mindanao. What appears as power oversupply by 2017 can become undersupply the next year when high demand from existing and new consumers – household, commercial and industrial – will kick in.

Bienvenido S. Oplas, Jr. is a Fellow of Stratbase-ADRi, a columnist in BusinessWorld, and President of Minimal Government Thinkers.

China’s coal and Germany’s renewables

Two recent articles here. The first is long, click the article if you want to see the full paper. Enjoy.
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Is China’s Use Of Coal Really Declining?
David Campbell
Global Warming Policy Forum, 16 May 2016

… there has been no departure from China’s policy of expansion of coal-fired generation capacity, and the rate of installation continues at the astronomical rates. China was responsible for 80% of the entire world’s increase in coal consumption this century and now consumes as much coal as the rest of the world combined. Coal-fired capacity has increased by 10% since 2013, and in 2015 approval was given for 155 new coal plants which themselves will have a capacity more than twice Germany’s entire capacity.

Though currently under-utilised, it is of course anticipated that this capacity will come on stream, part of the current Five Year Plan that proposes to pursue growth rates of 6.5% which, though a reduction on the previous 10% rate, is double or treble the best western rates. Such slowing down in consumption and installation is not evidence of peak coal but of the Chinese authorities trying to tailor growth in coal to the current slowdown in Chinese growth overall. This is not an absolute slowing down but a marginal slowing down in an overall absolute increase. To understand the position, one has to put these developments in the context of China’s energy mix, in which there is indeed planned to be a shift to renewables.

Chinese power generation is overwhelmingly dominated by fossil fuels, which accounts for 90% of capacity, coal itself accounting for 67%. Renewables account for the remainder, with this 10% being dominated by the 8% of hydro. Nuclear is 1%, solar and wind 1%. It is obvious from these facts that the great growth in solar is possible only because the growth starts from a very small base, though such is the absolute size of the Chinese economy that this tiny fraction of its capacity is very large by comparison to other countries’ solar industries. Even leaving aside the question of how much the Chinese renewables industry is directed towards export, it is equally obvious that even the current great growth in solar can have only a small marginal impact on the Chinese energy mix. It is justifiable to claim that China plans to raise the share of renewables in the energy mix to 20% by 2030, of which solar will provide a small fraction, and to cap coal at less than 62.5%. But it is preposterous to claim that this represents a movement from coal to solar that has any real significance for global emissions.

In brief, the planned shift in the energy mix cannot possibly represent peak coal because it is part of a plan to absolutely increase coal-fired generation. Yet again, the concept of carbon intensity is causing dreadful confusion. Even if this shift (and the installation of new fossil fuel plant) lowers carbon intensity, this will be brought about, not in reversal of, but in the course of continued growth in Chinese power generation and therefore of coal-fired generation. There is simply no possibility, other an unforeseen economic catastrophe or a technological miracle, that Chinese coal consumption will not grow by absolute amounts that are astronomical by western standards, and to a concomitant rise in emissions….

China’s strategic target, restated in its statement to the UNFCCC Secretariat of its Independent Nationally Determined Contribution, is to create ‘a moderately prosperous society’. Under the current Five Year Plan, this is to involve doubling 2010 gdp and per capita income by 2020, which will be made possible by a concomitant increase in power generation, with 2010 energy consumption expected to double by 2030. Even accepting that the share of renewables in the energy mix will double and that of coal decrease by 5%, elementary arithmetic shows that coal-fired generation will itself almost absolutely double. Let us give overall power generation the value of 100, of which 90 is fossil fuels (67 coal) and 10 is renewables, and then add another 100, of which 20 is renewables and therefore 80 is fossil fuel (62.5 coal). The shift to renewables has but the smallest impact on an absolute growth of fossil fuels to 170 and coal to 129.5….

It remains only to add that nothing has been said here about the position of India, which in 2014 overtook the US as the world’s second largest coal consumer.

Dr David Campbell is Professor of Law at Lancaster University Law School
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Germany’s Volatile Power Grid Spinning Dangerously Out Of Control …Prices Go Negative 25 Times In 2015! 
Pierre Gosselin
No Tricks Zone, 21 May 2016

The more volatile supply wind and solar energy that comes online in Germany, the more insane the market prices become. Too often the wind blows and the sun shines when power is unneeded, or they are simply AWOL when demand is high like in the wintertime.

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Germany’s wildly fluctuating wind and solar energy are creating grid and market havoc. Source: Agora.

Earlier this month Germany saw a spate of both sunny, windy days, thus leading to huge power grid surges during the Ascension holiday weekend, a time when many factories were running close to idled (see chart above).

Despite billions annually in subsidies, wind and sun still puny

And for a few minutes last Pentecost Monday afternoon – a holiday that saw very low national electricity demand – wind and solar provided almost enough power to cover all of the country’s electricity needs, reported Die Welt here. Leading Greens cheered, and proclaimed that coal and nuclear had not been needed for a time. But they cheered “too early” writes Die Welt’s business journalist Daniel Wetzel, pointing out that market and technical conditions became dangerously precarious and that in total “electricity represents only 21% of Germany’s total energy need.”

While Germany’s installed solar and wind energy may be able to get fairly close to fulfilling total electricity demand for a few minutes in rare instances that weather and demand conditions are just right, their share of total primary energy is still depressingly measly. Die Welt puts it all in true perspective:

“Despite billions in subsidies, ‘renewable energies’ wind and sun covered only 3.7% of Germany’s primary energy needs last year.”

Negative wholesale prices becoming rampant

Another debilitating feature of the weather-dependent renewable energies are the havoc they create on the electricity exchanges. Last week’s power grid overloading by wind and sun led to deep negative wholesale prices.

Spiegel here writes that the wholesale power price plummeted to -130 euros per megawatt (see blue curve in the right chart)! Literally, foreign consumers were being paid to take the power. (The black curve shows total German demand).

Moreover the phenomenon of negative wholesale prices (i.e. excessive power feeding uncontrollably into the grid) occurred a record 25 times in 2015, Spiegel writes. That was 4 times more often than in 2011.

Among the highest electricity prices in the world

With wholesale electricity prices dipping into negative territory, one might think that power must be very cheap for the consumer. Unfortunately this is not the case. At negative prices power companies lose money, and so are then forced to pass along these extra costs along to the end consumers. German consumers are paying close to €0.30 for each kilowatt-hour they consume – among the highest in the world.

The situation has gotten so alarming that leading politicians of Chancellor Angela Merkel’s CDU conservative party are now demanding an end to subsidies for new wind and solar installations.

Denmark slams brakes on wind projects

Not only Germany is struggling with wildly fluctuating grid and market conditions, which are leading to massive costs and pain for consumers, but so is Denmark. Die Welt writes:

“The situation has also led wind energy leader Denmark to a rethinking. Press reports say that Energy Minister Lars Christian Lilleholt has stopped the planned construction of five large offshore wind farms in order to protect consumers from large cost increases.”

World Bank’s anti-coal drama

The World Bank religiously follows the “save the planet” marching order of the UN. Let there be more expensive and unstable electricity in developing countries so long as no cheap and stable energy sources like coal are built. See these news reports.
The Guardian, July 2015,  The Guardian, May 2016,  The Nation Thailand.

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The Economic Times 2015,  World Coal,  Myanmar Business.

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wb1From Climate Home. It added that “the world’s top lender to developing countries announced it would spend 28% of investments on climate-related projects by 2020.”

Good move, WB. Then more Asian developing countries will boycott you as they need cheaper, stable electricity supply without need for subsidies and energy taxes. China’s AIIB and private banks will be more than happy to lend to those governments or private firms in these countries to build more coal plants.

Dark streets and expensive electricity will kill more people today than “man-made” CC/warming 100 years from now. Dark streets mean more crimes,  more robbery and rapes and murders, more road accidents at night. And more fires as more poor people turn to candles.

The rich and big companies? They can buy huge and expensive gensets that run  on diesel, they want 24/7 electricity.

Perhaps the WB and UN should conduct their regional and international meetings in countries which are energy-poor. Like Myanmar, Cambodia, India and Nepal. Then they will make  sure that they will stay in 5-star hotels there which have back up gensets that can ensure 24/7 electricity. They hate brown outs even for 1 minute but they don’t care if those countries will  have frequent black outs because of  insufficient baseload power plants.

Energy rationing and central planning is wrong. Big governments and foreign aid like the WB are among the big practitioners of global central planning.

EPDP lecture on energy planning

power3Last Thursday, I went to UPSE to attend this lecture. Great one, as usual. Dir. Irma Exconde is a friend, a fellow UPSE-PDE alumni, her batch in 2002 was 4 years younger than mine.

Dir. Tamang discussed the process in crafting the PH energy plan (PEP) and the Power development plan (PDP). I told Dir. Irma that with the long process of consultations and meetings to produce a national plan, I really would have no patience working in government.

Then Irma discussed the important aspects of the PEP and PDP, 2015-2030. Among the slides she presented, below. In Luzon grid last year 2015, rated or installed capacity by coal was only 35% of total but actual electricity contribution was 49% of total.

power 2015

In contrast, oil/diesel power plants, installed cap was 16% but actual contribution was only 1%. Why, because they are used only as peaking or peak load plants, they run only for few hours a day on weekdays, on high demand hours and are not used during off-peak hours, or weekends and holidays.

For the new renewables, wind + biomass + solar is 3% of installed cap but actual electricity output only 1% of total.

I mentioned during the open forum that the DOE is subjected to environmental terrorism. If they approve more coal power plants, the DENR and CCC will go to media or in Congress to shift the blame to DOE. Known climate junketers and climate negotiators (Tony la Vina, Yeb Sano, etc.) lambast the DOE and the President why they are commissioning more coal power plants.
I also mentioned the need for more dams and hydro power because we are entering a new era of global cooling (warming-cooling cycle, endless climate cycle), meaning more heavy rains, flooding, etc. for many years and decades to come.

Notice that in this slide, renewables like solar and wind, electricity consumers’ demand, transmission, etc. have their respective plans, but no mention of coal development plan. To mention coal in public discussions seems to be “politically incorrect”…

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In the “minor” conflict between DENR+CCC+ environmental militants vs. DOE on the latter’s granting of permits for more coal plants. I am on the side of the DOE. In 2015, 49% of total electricity generation in the Luzon grid came from coal power plants. Without those coal plants, or even slashing half of them, will result in massive, large-scale, daily and nightly blackouts in M.Manila and the rest of Luzon.

The anti-coal planet saviors will hate this scenario of course. They want their 24/7 electricity, they hate even a 1 minute brown out and power interruption so that they can do fb and tweet how ugly coal power is. Double talk and hypocrisy is their regular characteristic. The DOE, by allowing more coal plants, is protecting the public by securing more power supply, to be away as much as possible even from 1-minute brown outs.

As mentioned above, the actual contribution to electricity generation by solar+wind + biomass in the Luzon grid is only 1%. In case of massive, large-scale brown outs because of the anti-coal drama of DENR, CCC, climate militants, those big firms, hotels, manufacturing plants, hospitals, condos, etc. will keep their electricity. How? Lots and lots of gensets, noisy gensets that run on diesel, more dirty than coal power plants.

And the poor or lower middle class who get disconnected by Meralco or other distribution utilities (DUs) or electric cooperatives (ECs), for a few days or weeks they have no electricity, what do they use? Candles. More candles mean more fires, more destruction to private property, more injuries, more deaths.

Expensive, unstable electricity supply means more LGUs and villages have little street lights. Dark streets mean more road accidents, more crimes, more rapes and robbery. The anti-coal campaigners don’t want to recognize this social problem.

Cocktails after the lecture. From left: Rodel Meris, Dir. Tamang, Prof. Ruping Alonzo (UPSE faculty and EPDP Fellow), me, Lawrence Fernandez of Meralco, and Irma.

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Room was full. The 1-hour lecture became 2+ hours including Q&A.
Thanks again EPDP, for that fruitful public forum.