Category: Environment

Offshore wind

Irish 10-year bonds are at 7.6%

The Minister for Energy has just launched a plan for a drastic expansion of offshore wind, wave, and tidal power.

Power generation is a capital intensive industry, renewables are particularly capital intensive, and offshore wind comes top.

There are not enough jobs in Ireland and capital is exceedingly expensive. We need projects that create jobs but don’t take a lot of capital.

Minister Ryan said “Every megawatt of renewable energy that goes onto the Irish national grid reduces our €6 billion annual fossil fuel bill [..].” Government subsidies for import substitution do not stimulate economic growth.

The plan that was put up for public consultation mostly concerns things that will be decided by the Dail after next. It does propose a REFIT for offshore wind: 14 cent per kilowatthour. That’s above the retail price of electricity.

McDonald and Cuffe on Metro North

On PrimeTime last week, Sean Barrett and Edgar Morgenroth cast severe doubt on the wisdom of Metro North. They are now joined by Frank McDonald.

Cairan Cuffe’s response starts with “[n]ow is the time to invest”. That says it all really. You can read the rest for yourself.

The Green Party is apparently still oblivious to the situation with the economy and the public finances. Cuffe wants to invest billions of euros in a project with a doubtful return. Gormley wants to spend unnecessary hundreds of millions of euros on waste disposal, despite warnings of his own EPA.  Ryan invests ESB’s money in electric cars and continues a subsidy scheme that does not deliver according to his own SEAI.

It is never wise to waste money, but now is a particularly bad time.

Dublin is badly served by public transport at present. Liberation of the bus market is the way forward.

UPDATE: Metro North got planning.

Climate Change Bill

In Q4 2009, the Dept Environment published a Framework for the Climate Change Bill 2010 promising a Heads of Bill by Q1 2010. The Oireachtas Joint Committee on Climate Change and Energy Security decided not to wait for that and published a draft bill. This was “published” to members of the press last week, and has been made available to all this week.

There are two significant differences between the Government’s sketch and the Oireachtas’ draft. First, the Oireachtas sets a target for energy efficiency whereas the Government does not. Second, the Oireachtas puts an Taoiseach in charge whereas the Government puts the Minister of the Environment in charge.

Energy efficiency is a means to an end. Setting an energy efficiency target is therefore inappropriate. Greenhouse gas emissions are primarily from agriculture, energy and transport — that is, beyond the control of the Minister of the Environment. It is therefore appropriate to put an Taoiseach in charge.

The Oireachtas’ draft is considerably more detailed and specific than the Government’s sketch (as you would expect). It is long on creating bureaucracy but short on details how emissions would be cut.

Oireachtas and Government agree that the target for greenhouse gas emissions in 2050 is 20% of the 1990 level.

If we run Hermes/IDEM/ISus out to 2025 and extrapolate trends from there, assuming a 2% annual growth of the economy between 2025 and 2050, we find emissions of 49 million metric tonnes of carbon dioxide equivalent in 2050 — 87% of 1990 levels. 60% is from fossil fuel combustion, and 36% from agriculture.

If we double the rate of decarbonisation of the economy (3.3% for energy, 2.8% for construction, 0.2% for methane, 0.9% for nitrous oxide between 1990 and 2025 in the baseline), 2050 emissions fall to 44% of their 1990 levels.

If we triple the rate, emissions go to 29%. If we quadruple the rate, emissions go to 22%.

Quadrupling the rate of technological progress (broadly defined) is very hard — particularly since Ireland’s baseline rate is rather high compared to other countries.

If we do away with agriculture, 2050 emissions would be 56% of 1990 levels. Doubling the rate of progress in energy and construction would reduce emissions to 17%.

Doubling the rate of technological progress is hard. Methane- and nitrous-free agriculture is not easy either.

It strikes me that 80% emission reduction by 2050 is on the ambitious side.

I would think that it is better to implement realistic policies than to set unrealistic targets.

UPDATE:

He_who_shall_not_be_named pointed out that the Oireachtas draft also has a target for 2020: -30%. We have repeatedly pointed out that the -20% target for that date cannot possibly be met without draconian measures such as a prolonged depression or a ban on cows. -30% is, of course, even more difficult.

Covanta writes off Poolbeg investment

(H/T to Joe & Valerie)

Covanta has written off its entire investment on the Poolbeg project in its 3Q results, citing the “political and regulatory environment” in Ireland. That’s just the sort of language we want in a SEC filing.

According to RTE, Covanta still intends to build the incinerator but does not feel bound to do so.

I’m not sure whether this is more bluff by Covanta, prudent accounting on their part, or a sign that Minister Gormley will after all waste a substantial sum of money, raise waste charges for everyone, and condemn the country’s waste to landfill for years to come.

Tropics even more sad if the Earth heats up

Last year, La Stampa published a rather skeptical article on climate change under my name. It was not written by me, as discussed here and here. Today, the record is set straight (original). The piece calls for a carbon tax in Italy.