And a bunch of them live in Germany;
EOn continues to struggle under German energy policy, with gas generation made “barely profitable” by pro-renewable market arrangements and nuclear generation slashed and taxed by government decree.
[…]
One problem is that renewable generation is given priority access to the grid when it is available. This sometimes prevents gas-fired generation from operating during peak hours and has altered the economics of gas to such an extent that it is now “barely profitable to operate,” said CEO Johannes Teyssen. “In most European markets, the gross margin for gas-fired units is approaching zero or is indeed already negative.”
“Paradoxically, this benefits carbon-intensive lignite-fired assets which are more harmful to the earth’s climate, whereas flexible, climate-friendlier assets are barely profitable,” said Teyssen.
Moreover, the company does not benefit from good enough renewable performance to balance this negative effect of the energy transition. Despite the issue outlined above, oil, gas and coal produced 61% of EOn’s power generation and brought in €1.2 billion (69%) of pre-tax earnings from generation. Renewables produced 11% of power, but reported an operating loss of €67 million that actually reduced pre-tax earnings by 3%.
h/t Eric A.
This must explain why Germany’s economy is in the dumps.
This must explain why Ontario’s economy is in the dumps.
Gee, government is stupid, who knew? Kevinw, you nailed it, while imagine not thinking so. Germany is leading Europe with annual growth of 0.3% When a country with brilliant engineering and a strong work ethic stagnates, one must look for external factors. Energy costs? You bet.
This must explain why the U-S economy is in the dumps.
Behind the useless poltician comes the worse than useless bureaucrat, far worse than we can imagine, behind the useless bureaucrat comes the worse than useless judge, who is totally ignorant of economics, science, sense and technology and proud of it. Coming soon to a province near you.
So the fact that “renewables” are subsidized by billions,which must come from the taxpayer,or in Oblamer’s case,print more, cuts into profits, is a surprise? So just who keeps perpertrating the myth that the squareheads are so smart?
Basic science 101….energy is neither created nor destroyed,just transformed, thus renewable is a scam. Oh wait. Anybody with more than one active brain cell knows this! Darwin was wrong.Humans are veeeerrrryyy capable of de-evolution.
And make no mistake, EOn is one of the best run utilities in the world. Very low outage rate and very high power quality. If EOn has troubles they will be entirely government-inflicted.
Within its system, EOn has almost 9,000 MW of wind generation. It’s been documenting the performance of its wind fleet for years. It’s from EOn’s own performance reports where most of the hard evidence comes that wind doesn’t work. And the bigger wind generation gets, the bigger the problem it poses.
To its credit, EOn has never tried to hide any of this. To the contrary, EOn has been blunt about the shortcomings of its wind fleet far beyond where most utilities will go.
Where did we get the impression that leaders and policy makers are intelligent ? Most seem to lack the most essential qualities for good governance, logic and common sense. The two qualities you cannot get from a good education or being born with a silver spoon in your mouth.
At least the Czechs have logic and common sense.
http://www.world-nuclear-news.org/NP-Czech_Republic_looks_to_more_nuclear-0911127.html
Related;
http://quixoteslaststand.com/2012/11/15/head-of-the-german-energy-agency-calls-their-renewable-energy-act-pure-insanity/
On point, actually, please see the attached:
http://www.vancouverobserver.com/blogs/climatesnapshot/more-oil-sands-pipeline-future-will-want-iea,
with the IEA demand/supply plan included as a link.
I’d say it (the IEA “plan”) pretty much reads like an Ontario Hydro demand/supply plan from the days of Liberal Premier David Peterson and NDP Premier Bob Rae — straight from those guys they appointed to “guide” Ontario Hydro into the future.
Can’t just remember their names at the moment, but just ask Laurence Soloman and Tom Adams: they’d know the names by heart.
Back in the day, the plan to impugn central generation at the time was all about — fuel substitution (to natural gas, no less!) and energy conservation. The report back then might as well have been written by the current authors of the IEA forecast (actually, I’m not entirely sure that it wasn’t). Remember all of them light bulbs that Bob Rae sent around?
Lawrence and Tom always knew that nuclear power was an absolute financial dead end, and they expressed it in the only that made any sense at all — privatization.
So, the question for Canadians, I think, is, “are we prepared to take a back seat, and let it happen, or are we going to make it happen?” It’s clear that the IEA thinks we’re a junk yard dog, whereas in reality we have the most stable and secure supply of energy going.
More related;
http://notrickszone.com/2012/11/15/munich-blacks-out-welcome-to-the-future-of-germanys-energy-transition-harbinger-of-what-green-energy-holds/
David, there’s utterly no reason to take anything Barry Saxifrage says as truth. He’s a contributor to DeSmog Blog, meaning he’s just another Joe Romm disciple.
No, the IEA outlook has nothing whatsoever to do with the Ontario Hydro DS/P. The methodology is entirely different. And why would anyone take seriously anything from this report from the IEA? As soon as they write the words “climate catastrophe” they’ve just blown their credibility.
And your comments about nuclear power being a dead end is also stupid. It’s been made a dead end by government policy, nothing else. And for purely ideological reasons Norm and Tom and Larry were trying to make it so.
cgh 4:46p.m. — nuclear power made a dead end by government policy?
Ontario Hydro’s nuclear program has had, since its inception, total government support and coddling in the form of:
– ownership control (or, rather lack thereof) in the form of a shareholder motivated by inconsistent and highly-changeable political considerations rather than clearly-articulated long-term business objectives, leading to…
– little or no actual managerial accountability for cost or other measures of performance,
– financing made possible by the provincial debt guarantee (which financing would not have been available on similarly favourable terms and conditions otherwise, if at all — there’s the money line, if you’ll pardon the pun),
– unlimited (state-assumed) liability protection,
– de facto immunity from pubic scrutiny (made worse by the Harris Energy Competition Act of the late 1990s, which removed any pretense of third-party review — there never was any third-party regulatory oversight: anybody really know what’s going on at OPG these days? I didn’t think so…),
and,
– slavish adherence as a matter of policy (across the political spectrum) to a technology profile that is at best flaky and at worst outright dangerous.
The upshot of all of which is that Ontarians are left with precisely the same predicament faced by Mrs. Thatcher when she went to break up and privatize CEGB — nuclear liabilities beyond quantification.
So, I guess if that’s what you mean by “dead-end” government policy, I’d say you’d be right. If, on the other hand, you mean that the Province of Ontario has somehow interfered with the nuclear program in such a way as to put it off-track, I’d say that you would be 100% wrong (and I’m not normally given to absolute positions).
If Ontario Hydro had been subject to the discipline of investor-ownership, appropriate regulation and, wherever possible in an industry characterized as something less than amenable to a fully competitive model, the marketplace, it’s nuclear program would have been abandoned long ago — which is my take-away from what Lawrence and Tom have said, at least in the past.
I think I get the part about the IEA report being junk — my point about the Ontario Hydro DSP of the David Peterson/Bob Rae era (as a point of interest, has there been one since?) is that any forecast proceeding from a premise of “policy driven” demand curtailment and/or supply options above market price (which is what EOn is facing) is pretty much doomed to failure.
David, your post is riddled with so many errors it’s hard to know where to start.
“beyond quantification”
No, the liabilities were and are all quantified.
The CEGB’s liabilities were all quantified too. The problem for nuclear in Britain at the time was the government did not want to assume financial responsibilities for which it had incurred.
“financing made possible by the provincial debt guarantee”
Yes indeed, we hear this canard all the time. Fact is Ontario Hydro’s finances were better at times during the 1980s than the Province’s. And Ontario Hydro represented a significant portion of the assets on which Ontario’s credit rating was based.
“little or no actual managerial accountability for cost or other measures of performance”
More Energy Probe rubbish. Ontario Hydro was financially accountable through the rate structure and its required filings to the Ontario Energy Board.
“de facto immunity from pubic(sic) scrutiny”
See above. Furthermore, OPG is being used as the cash cow to finance lower electricity rates despite higher production costs from renewables. It’s allowed an ROI of only 7%.
“you mean that the Province of Ontario has somehow interfered with the nuclear program in such a way as to put it off-track”
That’s precisely what I mean, and the gyrations of the Ministry of Infrastructure over the past half decade, particularly with respect to the bidding conditions and process for new nuclear plants demonstrate that. Want another example? The absurdity of two dozen government ordered stops and starts to Darlington which roughly doubled its capital cost to no useful purpose.
“a technology profile that is at best flaky and at worst outright dangerous”
You really don’t know anything about energy system analysis with respect to production and safety, do you? That’s alright, neither does Norm Rubin, as was shown at ONSR in 1987. Nuclear is by far the safest way to generate electricity discovered to date.
cgh, 8:53p.m. —
I don’t think there’s any need to get personal, but you might want to check the facts around what you’re asserting. Take for example your claim about:
‘”beyond quantification”
No, the liabilities were and are all quantified.
The CEGB’s liabilities were all quantified too. The problem for nuclear in Britain at the time was the government did not want to assume financial responsibilities for which it had incurred.’
That’s not quite how Mrs. Thatcher saw things (The Downing Street Years, p. 685):
“But in the autumn of 1988 the figures for the cost of decommissioning the now ageing power stations where suddenly revised upwards by the Department of Energy. These had been consistently underestimated or perhaps even concealed. And the more closely the figures were scrutinized the higher they appeared. By the summer of 1989 the whole prospect for privatizing the main generating company which would have the nuclear power stations started to look in jeopardy…”
“Alan Walters had been urging from the previous autumn that all the nuclear power stations should be removed from the privatization…The figures for decommissioning the other power stations started to look uncertain and then to escalate…”
“[a]s a result of the transparency required by privatization we also became the first country in the world to investigate the full costs of nuclear power — and then to make proper financial provision for them.”
—-
With respect to your further assertion about
“financing made possible by the provincial debt guarantee”
Yes indeed, we hear this canard all the time”,
you may also want to consider the following excerpt from the Public Accounts of Ontario, note 6 to the financial statements for the Province of Ontario for 1997-1998 (the last year Ontario Hydro existed prior to its being broken up):
“Debt Issued for Ontario Hydro
Advances to, and debt incurred for, Ontario Hydro on the province’s Statement of Financial Position relate to amounts borrowed on behalf of Ontario Hydro. The province had issued securities, and advanced the proceeds to Ontario Hydro, in exchange for Ontario Hydro bonds with like terms and conditions. These transactions, and the ensuing retirement and debt servicing costs are the result of a financing alternative and are not part of the province’s own budget plan…
Provincial Guarantees of Ontario Hydro Debt
…During the year, Ontario Hydro paid the province a fee related to the provision of the debt guarantees of $156 million (1997, $162 million).”
A couple of things you might wonder about: if the provincial debt guarantee was a “canard” as far as Ontario Hydro was concerned, why did Hydro find it advantageous to have the Province borrow on its behalf, and further, why did the Province charge Hydro $160 million for the service, exactly? Could the $160 million approximate the market interest discount Hydro received as a result of the provincial debt guarantee?
At any rate, following Hydro’s break-up, the province (through OEFC) still holds the bag for Hydro’s stranded debt (almost exclusively associated with the nuclear program), which remains at about $15 billion. Good thing that that debt guarantee was in place, I’d say, or the bondholders would have taken a $21 billion hit in 1998. Alternatively, if Hydro were not government owned, the debt guarantee would not have existed and maybe Hydro would not have been quite so far in debt.
So there are a couple of points. I could go on, but we’re seriously off topic now and I don’t want the boss lady to get mad at us.
Considering that Germany bans home-schooling and failed to sentence the bastard who stabbed Monica Seles to jail (and they tried twice), yes, Germany is run by crazy people.