#AceNewsDesk – Prices in the US rose faster than expected last month, as rising energy and food costs pushed inflation to the highest rate since 1981.
By Natalie Sherman Business reporter, New York
The annual inflation rate rose to 8.6% in May, the Labor Department said, after easing in April.
The rising cost of living has been squeezing households and putting pressure on policymakers to bring the issue under control.
The US central bank has been raising interest rates since March.
Analysts had hoped that the moves were starting to work to cool economic activity, easing the price pressures. But the conflict between Russia and Ukraine, which has driven up the price of oil and commodities like wheat as it disrupts exports from the two countries, has made tackling the problem more difficult.
Food prices were up more than 10% last month compared to May 2021, while energy surged more than 34%.
But Friday’s report showed the increases continue to spread throughout the economy, pushing the cost of everything from airline tickets and clothing to medical services higher.
“So much for the idea that inflation has peaked. Consumer prices blew past expectations – and not in a good way with the 8.6% annual increase the fastest in more than 40 years,” said Greg McBride, chief financial analyst at Bankrate.com.
“Worse the increases were nearly ubiquitous. Just no place to hide.”
The US has been grappling with rising prices since last year, when an unexpectedly strong economic rebound from the shock of the pandemic – driven by large doses of US government spending, including direct cheques to households – overwhelmed supplies, prompting companies to raise prices.
Now the war in Ukraine has spread the problem around the world, with Covid-related shutdowns in China this spring contributing.
As the rising costs hit household purchasing power and prompt a pullback in spending, officials are warning that growth in many countries is at risk of a sharp downturn.
“The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid,” World Bank President David Malpass said this week……….Reuters
The average petrol price in the US is approaching $5 a gallon
US stock markets fell in the wake of the inflation reports, with all three major indexes dropping more than 2%. The falls added to weeks of declines in US shares, as investors become nervous about the path for the economy.
“Even if inflation peaks soon, it’s unlikely to decelerate quickly.” said Richard Flynn, managing director of Charles Schwab UK. “High prices may put pressure on consumer spending into the medium term.
“Add ongoing supply-chain problems and the economic impact of Russia’s invasion of Ukraine to the threat of inflation, and it’s easy to see why fears of a downturn have risen swiftly.”
For now, the US labour market has continued to add jobs, a sign that growth is continuing.
But wages have not kept pace as prices climb. The rising cost of living has especially hit lower income households, for whom basics like food and energy make up large portions of spending.
Polls show a majority of Americans see inflation as the top problem facing the country. Consumer sentiment has plunged and US President Joe Biden’s approval ratings have sunk as Republicans criticise him over the issue.
Over the month, prices gained 1%, driven by the rising cost of petrol, which has hit new records in the US, approaching an average of nearly $5 a gallon.
In hearings in Washington this week, US Treasury Secretary Janet Yellen said bringing down prices was the “number one priority”.
In a statement, Mr Biden said “we must do more – and quickly – to get prices down here in the United States”.
“I’m doing everything in my power to blunt Putin’s price hike, and bring down the cost of oil and food,” the president later pledged at a speech at the Port of Los Angeles in California.
Roberto Perli, head of global policy research at Piper Sandler investment bank, said he expected prices to come under control as America’s central bank, the Federal Reserve, increases interest rates. But he warned that raising borrowing costs will hurt economic growth.
“For now, the US economy is very healthy and you see it reflected in the fact that there is such a strong demand for pretty much everything, goods and services. But the Fed has to take care of the problem,” he said.
“The result will be not now but in the quarters ahead a significant slowdown in the US economy, induced in large part by the Fed.”
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#AceNewsDesk says accoridng NET Zero Watch: Ukraine crisis ‘shows need’ to rely on home-produced energy but green lobby and trade group disagree over how to achieve aim: Officials prepare for possibility that further small suppliers may collapse if gas prices rise even further 2) Putin sabre-rattling causes a seismic shift in views on North Sea energy The Sunday Times, 20 February 2022
3) Wind farms were paid not to generate half their potential electricityThe Sunday Telegraph, 20 February 2022 MPs say ‘constraint payments’ made to three farms in 2020 are an example of unnecessary costs being charged to consumers
Vladimir Putin is emerging as an unlikely saviour of UK oil and gas as tension between Russia and Ukraine heightens worries over fuel imports and leads to further calls for ministers to encourage drilling in the North Sea.
Russia is the largest provider of diesel to the UK — about 3.6 million tonnes were imported in 2020 — but Putin, the Russian president, is likely to cut off supplies in retaliation for the tough sanctions threatened by Boris Johnson if Ukraine is invaded. Diesel is essential for motor vehicles, trains, construction and the military.
Separately, Offshore Energies UK (OeUK), the trade body, has warned that domestic production of oil and gas will decline sharply over the next five years, which will increase Britain’s dependence on imports. The group said that Russia’s threatened invasion of Ukraine had shown the importance of the UK having its own energy supplies and minimising imports.
“The best way of securing supplies for the UK is by being at the start of any pipeline, not the end,” said Ross Dornan, from OeUK. “The move to net zero means that UK demand for oil and gas should decline over the next three decades, but lack of investment means UK production is falling far faster than demand.
“That is creating an energy gap that will have to be met by imports, including from Russia. The resources under the UK’s continental shelf mean our nation can minimise this risk but only if we invest in new fields and wells.”
More than 11 billion “barrels of oil equivalent”, the industry measure, are in proven or probable reserves in the North Sea, enough to meet UK demand for 13 years at current rates, but low investment means that less than half (40 per cent) can be extracted. OeUK said less than £1 billion of North Sea investment had been committed by oil and gas companies this year, down from £16 billion in 2014.
In recent weeks, UK ministers including Greg Hands, the energy minister, and Kwasi Kwarteng, the business secretary, have signalled greater support for new North Sea projects. Hands said Britain must keep drilling for gas in the North Sea for “reasons of energy security”.
Their position is at odds with environmentalists and the SNP, which has signalled a shift away from fossil fuels because of concern over the climate crisis. Ryan Morrison, from Friends of the Earth Scotland, said the answer was to focus on ending our need for diesel and boosting public transport.
“The UK’s fossil fuel energy system only benefits oil and gas companies who make billions in profits whilst millions of people can’t afford to heat their homes and our climate is destroyed. It beggars belief that anyone with a shred of concern for people or the planet would want to further lock us into that system.”
The Oil and Gas Authority (OGA) indicated last week that increasing UK production could stabilise supply and benefit the climate as imported fuel may come from countries that are less committed to reducing emissions.
A three-year study led by the OGA, which concluded this month, found that using wind to power UK oil and gas platforms instead of gas and diesel generators could abate 70 per cent of offshore emissions. It said eight new North Sea fields were expected to come on line this year with a further 19 projects on the way.
There is speculation that drilling for oil and gas could begin in the Rosebank field, west of Shetland, and at Jackdaw (which was initially rejected last year), Marigold, Brodick, Catcher and Tolmount East in the North Sea.
Tony Mackay, an Inverness economist who advises the World Bank and the European Commission, said about 15 undeveloped oil and gas fields were in UK waters, including the Cambo discovery.
Their development, he said, should not have an adverse effect on the growth of renewable energy in the UK and “would certainly reduce our import dependency”.
According to the Digest of UK Energy Statistics, 3.6 million tonnes of diesel were imported from Russia in 2020. A further 854,000 tonnes came from Sweden. In total, the UK paid Russia more than £4 billion last year for fuel; £2.6 billion for refined oil (mostly diesel but also aviation fuel); £1 billion for crude oil and £600 million for gas.
About 3 per cent to 4 per cent of UK gas came directly as liquefied natural gas from Russia, which also supplies Europe via a pipeline network that includes the UK. It suggests that the UK’s dependence on gas from Russia could be higher.
The UK government has made a commitment to end the sale of new diesel and petrol cars by 2030 but the Committee on Climate Change estimates that UK oil and gas demand will still be about 65 million tonnes of oil equivalent by 2050, with only a third met by domestic production. Gas sourced from the UK continental shelf is projected to decline annually by about 6 per cent unless more fields are opened.
Ryan Crighton, policy director at the Aberdeen & Grampian Chamber of Commerce, said increasing reliance on fuel imports placed jobs and Britain’s energy security at risk, and exposed consumers and businesses to price spikes.
“There is also a strong environmental case for producing more domestically. There is no current future scenario where there is not a requirement for some oil and gas,” he said.
“This leaves us with two options: to produce this domestically, supporting 200,000 jobs with full control over the regulatory environment in which it is extracted, or to import an increasing amount of our energy, with the heavier carbon toll that shipping it from other parts of the world carries. The latter makes little economic sense and even less environmental sense.”
Wind farms have been paid to refrain from producing up to half of the electricity they are capable of generating, according to research that led MPs to warn that “inappropriate” decisions on wind power were “forcing excess costs onto consumers”.
An analysis found that, in 2020, three large wind farms in Scotland were paid a total of £24.5 million to fail to produce about half of their potential output.
Researchers said the “constraint payments”, which are ultimately added to consumer bills, were being fuelled by a high concentration of onshore wind farms in Scotland often leaving the electricity grid unable to cope on windy days.
The Renewable Energy Foundation, a charity that publishes energy data, said the problem would continue until “until there is more than sufficient interconnection between Scotland and the centres of demand in England”. The analysis comes ahead of an expected spike in electricity bills.
Craig Mackinlay, who leads the Net Zero Scrutiny Group of Conservative MPs, said the constraint payments were an example of unnecessary costs being charged to consumers.
A government spokesman insisted the payments were “not a viable income stream for onshore wind developers”, but a new analysis by REF found some individual wind farms were agreeing to not produce up to half of their potential output in order to avoid overwhelming the grid.
Excess costs ‘forced onto consumers’
In one case, £7.7 million in “constraint payments” handed to the operator of a 23-turbine scheme in Scotland in 2020 led to the wind farm deliberately failing to produce 51 per cent of its potential output. In another, SSE, the operator of the 33-turbine Strathy North wind farm in the Highlands, was paid £5.9 million to avoid producing 48 per cent of its capacity.
Last year, which saw particularly low wind speeds, the 59-turbine Dorenell wind farm in Moray, owned by EDF Renewables, was paid £1.5 million to avoid producing a total of 179 gigawatt hours – 35 per cent of its potential output.
Dr Lee Moroney, REF’s principle analyst, said: “When wind farms have been so poorly sited that they are discarding up to 50 per cent of their annual output, the public has every right to ask how on Earth these projects came to get planning permission.”
Mr Mackinlay said turbines appeared to be constructed “in inappropriate locations, forcing excess costs onto consumers and harming our precious natural heritage in the process”.
More renewables ‘will protect customers’
A government spokesman said: “Gas is expensive and wind power is cheap, so we need more renewables to protect consumers. Constraint payments remain the most efficient option for National Grid to keep Britain’s lights on, and are only used when there is excess supply.”
A spokesman for EDF Renewables said it had to respond to National Grid’s constraint requests “in order to manage the system and keep the lights on”.
Alistair Phillips-Davies, the chief executive of SSE, said: “Wind will end up generating most of the energy the country needs, and the best resource is in Scotland. Britain needs more wind power to minimise our reliance on volatile international gas markets.”
Scottish Renewables, a trade body, said constraint payments added just £1 per year to the average household electrical bill.
On Friday, about 40 per cent of the day’s electricity supply was generated by turbines – far higher than average – amid the strong winds brought by Storm Eunice.
EXCLUSIVE polling reveals the depth of fear in Great Britain about the cost of living crisis and shows that a majority of people want the increase in National Insurance contributions due to hit workers and employers in April to be ditched.
More than half of people (55 percent) support scrapping the tax rise while just 17 percent oppose axing it.
Senior Conservatives have urged ministers and Treasury officials to listen to the public and abandon plans for the increase. There is worry that the party’s reputation for economic competence is in jeopardy and it risks punishment at the polls.
The rising cost of living is the source of greatest concern for adults in Great Britain (54 percent), according to the research by Redfield & Wilton Strategies.
It is a much greater source of anxiety than the pandemic (14 percent), the potential Russian invasion of Ukraine (14 percent) or climate change (11 percent).
Alleged rule-breaking parties at Downing St during the pandemic is the top concern for a mere four percent of respondents.
Former Brexit secretary David Davis, who has pressed for the Government to stage a u-turn and cancel the planned increase, said the polling showed “the harsh truth is the public are wiser than the officials at the Treasury”.
He said: “They know the impact on ordinary people; they know the impact on jobs; they know the impact on wages; they know the impact on how much they can spend.
“All of these you would think are critical variables for the economy generally and [ones] the Treasury appears to be ignoring – and ignoring at a time when it actually doesn’t need the money.”
Mr Davis fears the Government is in danger of suffering electoral damage comparable to the aftermath of 1992’s Black Wednesday.
Warning there is a “great risk in this for the Conservative party,” he said: “[People] vote Conservative because they think we are going to keep the taxes down and make the economy work. At the moment, I think people expect us to put taxes up more than anybody else so that’s a very bad reputation for a Tory party to have; the last time we had that reputation we lost over 100 seats.”
Last month the Chancellor and the Prime Minister insisted the increase in National Insurance, which is expected to raise £12billion, “must go ahead”. All employees, employers and the self-employed will pay 1.25p in the pound for a year; the additional tax will then be collected through a “health and social care levy”.
Former Conservative leader Sir Iain Duncan Smith urged ministers to focus on the top concerns of citizens, telling the Sunday Express: “They need to listen to what the public is really concerned about, given the terrible increase in cost of living, mostly driven by the energy price spike.”
Sir Iain warned against increasing National Insurance to fund the NHS.
He said: “That would be a mistake. That would be throwing the burden of that onto the shoulders of people who can’t really afford to pay it.”
The former work and pensions secretary also pressed for an end to “VAT on energy products full stop” and he wants green levies axed.
The Prime Minister is being told that people are caring less about so-called partygate but it is “essential” that taxes are slashed or the Tories will be “punished” at the ballot box.
A senior Conservative insider said: “The data is clear. Voters want to see the PM leading on their priorities.
“People are caring less and less about parties and more about the cost of living. A commitment has been made that, by the next election, taxes will be slashed. This is essential.”
Pressing for MPs to put pressure on No 10 and the Treasury, the insider said: “A Conservative party which oversees this level of debt and high taxation will be punished – MPs know this, and now is the time for them to apply pressure into keeping the PM and the Treasury honest.
“Significant power lies in the backbenches. They must use this to ensure conservative values are heard and acted upon.
“If we do not act fast, the positives we see will be for nothing. Party members are seeing the migration issue dealt with head on, the Government is leading on the Ukraine crisis, and our economy is well primed for a strong recovery.
“The party must ask one fundamental question: what kind of nation do we want? A high tax, debt ridden one? Or a freer, more dynamic Britain?”
Labour says it supports greater funding for health and social care but opposes increasing National Insurance contributions because of the impact on working people and businesses.
Shadow Chancellor Rachel Reeves said: “We’re all noticing how much prices are going up – whether that’s school shoes for our kids, the ingredients for our Sunday roast, or when we get our energy bills. The Government needs to get a grip on this crisis made in Downing Street.
“Instead all they’ve done is hike taxes at the worst people time and given people a dodgy buy now, pay later scheme for their energy bills.”
John Longworth, a former director general of the British Chambers of Commerce who today chairs the Independent Business Network, wants the National Insurance increase cancelled and urged the Government to go for high growth policies.
He said: “The government need to get real if they want to be re elected: change course on net zero, cut VAT on fuel.” …..
In some cases the old-fashioned systems are replacing newer technology that is failing to live up to the task. Chris Anstey, 68, from Shropshire, moved into a 10-year-old eco home two years ago, which is heated by an air source heat pump.
Although the house is well insulated and sealed off from any draughts, Mr Anstey said the heat pump is less efficient in colder conditions, when it is needed most. As a result, he uses a wood-burning stove to heat his house on cold nights.
“We tend to leave it burning from around 4 o’clock onwards and it probably saves us around 20kWh of electricity,” Mr Anstey said. “And of course if there’s a power cut, it provides us with a source of heat.”
Mr Anstey buys wood directly from the National Trust and dries it himself on his property. “You have to use seasoned wood,” he said. “Kiln-dried wood is quite expensive these days.
“At the moment, with energy prices so high, someone buying it to heat their home will still save a bit of money.”
Mr Anstey added that soaring bills had forced him to change his energy habits. “We are definitely using less electricity,” he said.
“We have an Economy 7 meter, which charges less for the energy we use at night, so we are using as much as we can off-peak.”
Jenny Holden, 47, from Lichfield, Staffordshire, bought her wood-burning stove six months ago as heating bills began to rise. She said that burning wood had helped keep her energy usage low.
“Previously, we didn’t really think twice about turning the thermostat up. But with rising costs, we have made a family adjustment to light the fire in the morning and at night to help heat the house.”
Ms Holden said her family had turned to creative ways to reduce their heating bill besides switching to the stove.
“We also have cosy blankets in the living room for the kids,” she said. “We’re only filling the kettle for the drinks we need, and I open the oven after cooking to utilise that heat. They are small changes that we hope will make a bit of a difference.”
The Liberty Steel’s chief exec’s budgetary shortfall has exceeded £200m
Soaring electricity bills are undermining the efforts of the troubled metals tycoon Sanjeev Gupta to retain control of his British steel plants and save them from collapse.
Industry sources said that Mr Gupta’s budgetary shortfall has now ballooned to more than £200m as he fights to restructure debts previously provided by failed lender Greensill Capital.
Parts of Mr Gupta’s Liberty Steel empire in the UK, have been left exposed to electricity prices that have tripled over the last year.
Many of the company’s plants make steel using electric arc furnaces rather than traditional blast furnaces as part of Mr Gupta “greensteel” initiative that recycles scrap steel.
The electricity is generated from renewable sources such as wind or solar.
Mr Gupta is fighting to stay in control of his UK interests despite the HMRC serving him with a winding up petition over £26m in unpaid tax. The business owns sites at Stocksbridge and Rotherham, which employ around 2,000 people.
Failure to pay the debt would lead to the four companies affected being placed into compulsory liquidation.
Other creditors could also “piggy back” the legal claims and also demand payment. Speciality Steel’s claim has been scheduled for a hearing in late March. It is unclear when the cases against the other three companies will be heard.
A spokesman for GFG Alliance, the holding company of Mr Gupta’s global interests, said the offer was £500,000-a-month for six months. GFG remains in talks with HMRC to remove the winding-up petition.
Mr Gupta has defied his critics by retaining control of his business during the pandemic despite the collapse of his main lender, Greensill Capital nearly a year ago.
Mr Gupta has retained control of operations in Australia after striking a rescue deal with debt funds Bain Capital, Oaktree and White Oak . He is also fighting to stay in control of his businesses in Continental Europe.
One industry source said that the new investors could make it more difficult for Mr Gupta to move profits around GFG to fund the likes of the UK, France and Czech Republic.
A spokesman for GFG Alliance said: “The business is being supported with working capital, targeted at profitable production campaigns.
They added that the payments to HMRC were supposed to be an interim measure while the UK businesses restructured their finances.
The spokesman continued: “All current tax bills are up to date. Notwithstanding HMRC’s rejection of our offer we remain in discussions to reach a resolution which would protect thousands of jobs and domestic supply chains.
“GFG’s UK business are strategic assets for the country and can have a viable future. We are working with all creditors to achieve a consensual restructuring and settlement of debt, allowing recapitalisation of the companies.”
Devoid of any answers to green problems, all they have is a narrative of death, destruction and despair
Rarely have I looked forward to a debate with less relish than the one I appeared in on Thursday night at the Cambridge Union. The motion was “This House Would Extinguish The Rebellion”. And I accepted because on the opposing side were none other than Roger Hallam, the co-founder of Extinction Rebellion (XR), and Rupert Read, eco-spiritualist and former XR spokesperson. They are two of the highest-profile climate activists in Britain and I wanted to see for myself what they were like and what they had to say.
Ever since the rise of the child-prophet of doom Greta Thunberg, my overriding impression of the climate movement has been that it is dominated by totalitarian impulses, a delight in mob rule, apocalyptic preaching, disdain for ordinary working people, and a profound dislike of human beings.
And with the XR offshoot Insulate Britain reportedly planning to hold raves – as in nightclub raves – on the M25 this weekend, it seemed as good a time as any to see if perhaps I’d been unfair on this lot.
Were they merely raising awareness of important issues, albeit in an irritatingly disruptive way, as their more intelligent defenders would have us believe?
Or were they, as I had always thought, a bunch of loony Lefties who have managed to seize control of the narrative and who couldn’t care less what damage they cause in pursuit of their extreme objectives?
Unfortunately, the debate was just as gruelling and unpleasant as I had feared. With such enormous scientific and political questions at play, it was hard not to wince at some of the more gratuitous and extreme rhetoric. At one point, one speaker compared carbon emissions to genocide. When so many people think they are grappling with imminent mass extinction, the mood cannot but remain drearily heavy.
But in general, the student audience, if somewhat predictably in thrall to environmental apocalypticism, was reassuringly intelligent and made a range of clever interjections and floor speeches – when they were allowed to, that is, by my irritable opposition.
Indeed, points of information from feisty earth science students, or cocky philosophy second-years, provided a welcome relief from Hallam and Read, who lost no time in confirming most of my worst assumptions.
They appeared to be, as I put it to the audience in my speech, every bit as authoritarian, full of millenarian quasi-religious zeal, and arrogant as I had feared.
XR has embraced a cold-hearted absolutism – its obsession with “climate justice” apparently requires nothing short of the dismantlement of democracy and capitalism. And Read seemed barely interested in debating at all.
This made an odd counterpoint to his wheedling contrition, whereby, on behalf of his generation, he apologised to the young people in the audience for having failed them. His generation, he said, had not done enough to prevent the students’ certain and untimely demise.
In this he was repeating an address to first-year students at UEA, in which he told them that “the later part of the lives of most of you in this room is going to be grim or non-existent”.
It’s worth noting that most serious scientists would likely consider such predictions pure alarmism, if not mad. But then, if like an Old Testament prophet you are convinced that you alone are communicating the truth, you don’t have time to take account of the anxieties of ordinary mortals – even those whose extinction you remorsefully claim you have contributed to accelerating.
Hallam, by contrast, veered from peculiar attacks on the terms of the debate itself, demanding to know if it was a joke, to barking about “killer facts” and shouting at the audience that they were committing genocide and participating in crimes on a par with the shipping of slaves to America.
Like Read, he turned down points from the floor, albeit fewer.
Perhaps I shouldn’t have expected anything less. With scorn for ordinary people running through the “radical” climate movement’s activism and rhetoric like a stick of rock, extreme eco activists have never had much time for rational and cool-headed debate.
And Extinction Rebellion and its allies have shown nothing but disdain for the commuter trying to get to or from work to earn their daily bread; the woman on her way to the hospital.
XR clearly thinks that the mob should rule above, not even alongside, parliament.
But what I find most disturbing about this movement and some of its proponents is the way that they play on human fears, marshalling grotesque and sometimes misleading statistics – “killer facts” – with which to berate impressionable young people.
They never seem to make any reference to possible solutions; they merely prophesise imminent catastrophe. It is all death and destruction and gloom and doom spirals.
Instead of talking about promising scientific breakthroughs, or the need to marshal human ingenuity in order to solve environmental problems, people are told they are victims soon to die and also accessories to mass murder.
So I’m afraid this debate at the Cambridge Union did nothing to change my mind about Britain’s eco radicals. This bunch of self-appointed soothsayers appear to be more obsessed with halting progress, and spreading anxiety, fear and misery than they are with saving the world.
Benny Peiser of Net Zero Watch joins Stephan Livera on his show to talk about ‘net zero’ and the inaccuracy in the presentation of arguments on renewables.
* What is ‘net zero’ * Accurate treatment of costs and benefits * How much of it is regulation or market choice * ESG box ticking * The impact on everyday people * ‘Greenwashing’ by some countries * Why it will crash
BERLIN (AP) — Geopolitical tensions, including the current crisis between Russia and Ukraine, could hamper international efforts to curb global warming even as time to tackle the problem is running out (sic), U.S. climate envoy John Kerry said Friday.
Speaking at the annual Munich Security Conference, the former Secretary of State warned that the rise in the cost of energy stoked by the crisis may make consumers and governments wary of taking tough measures needed to reduce greenhouse gas emissions.
“It’s not going to be positive because it’s going to distract rather enormously,” Kerry said of the current tensions.
“The prices of fuel will inevitably rise even more,” he said. “It will push people towards the path of least resistance, which we are already too much locked into, and that will bring about the path of greatest destruction.”
At the same time, Kerry said the situation could encourage some European nations such as Germany, which depend on Russian gas, coal and oil for much of their energy needs, to expand the use of renewable energy or seek other suppliers faster.
“Will it spur transition? Yes, I think it will,” he told The Associated Press in a phone interview.
Kerry, who has led the Biden administration’s international climate diplomacy efforts, said the U.S. and European Union are in talks about their plans to prevent domestic producers suffering because of imports from countries without stringent emissions reductions measures.
Washington and Brussels hope to ensure their respective approaches to the problem are compatible, but potential trade conflicts loom with Russia and China, which strongly oppose any possible tariffs on their goods.
“Any country that is serious about climate will not be passive about competing with countries that are not,” Kerry said.
″(Russia and China) want freedom to continue to produce dirty products, that’s unacceptable,” he added.
Still, Kerry noted that without Russia, China and other major emerging economies reducing their emissions of planet-warming gas, global goals to limit temperature rise by the end of the century can’t be met.
“It is dictated by simple mathematics and physics,” Kerry said during his comments at the Munich conference.
Scientists have said emissions need to drop drastically this decade to prevent the worst impact of climate change.
“This is really the critical year during which we will either prove we’re serious and we’re going to try to do what we have to do in 10 years, or we can’t do it,” said Kerry. “In which case we will be spending trillions of dollars cleaning up the mess and trying to cope with the crisis.”
A U.N. science panel report currently being finalized and due to be published at the end of the month will likely highlight to governments the urgency to act, he said.
“I think it’s going to be quite dramatic in the picture it paints of how far behind we are.”
Ten battery packs melted in an energy storage facility in California, the second meltdown in five months.
The largest lithium-ion battery in the world experienced a meltdown over the weekend, its second in five months.
An energy storage facility owned by Vistra Energy in Moss Landing, California, triggered fire alarms on the evening of Feb. 13. Four fire trucks responded to the event and found around ten battery packs in the facility melted entirely, according to local broadcaster KSBW.
“The building’s systems contained the event without the need for outside assistance,” the company said in a Feb. 15 statement on the outage. “There are no injuries to personnel. An investigation is underway to determine what caused the safety system to activate. While this is in its very early stages, what we know is the water-based suppression system released water that contacted some batteries.”
Though it’s too early to know how the meltdown started, North Monterey County fire district chief Joel Mendoza told KSBW that the facility’s fire suppression system was activated and had successfully cooled the batteries when his team arrived on the scene “to the point that there wasn’t any flame or fire.
This is the second time in five months that the 300-megawatt facility has gone offline due to battery issues. The plant was less than a year old when the first incident took place in September, setting off sprinklers that damaged around 7,000 batteries, or 7 percent of the facility’s nearly 100,000 battery modules.
The energy generation company said in a release issued months after the September meltdown that the facility’s fire management software detected low levels of smoke in one area of the facility due to a “failed bearing in an air handling unit,” the company wrote, which armed the heat suppression system that, due to “failures of a small number of couplings on flexible hoses and pipes, sprayed water directly on a number of battery racks, causing some to overheat. This created more smoke, which generated more water, and so on.
In its statement regarding the latest meltdown, Vistra Energy said there are early indications that the September incident repeated itself. “There is early evidence that water hoses leaked and that some batteries shorted, creating smoke in the building, similar to what we observed with the September incident at our 300-MW Phase I facility next door,” the release states.
The most recent incident highlights how fragile battery storage systems are: Lithium-ion batteries ignite easily and the fires they generate are difficult to contain. Water only reacts with lithium—it doesn’t put lithium fires out. This poses problems for energy storage companies like Vistra, which are crucial to the renewable energy transition.
“The Moss Landing Energy Storage Facility is playing a key role in helping California achieve lower emissions and improve grid reliability, and systems like these will become more necessary as additional renewable power is integrated into electric grids across the US,” Vistra chief executive Curt Morgan said in a January release on the facility’s last meltdown.
In large facilities, any number of factors can create a cascading incident like Sunday’s meltdown. Vistra has embarked on an investigation into the source of this one, the company said in a statement. The facility remains offline in the meantime.
Specialists will be needed to put out a raging fire on an abandoned cargo ship in the Atlantic Ocean due to complications from burning lithium-ion batteries inside the thousands of luxury cars aboard the vessel.
A number of electric luxury cars caught fire aboard the ship, which was then abandoned as the blaze spread throughout the vessel. According to Reuters, it is unclear if the batteries started the fire, or if the fire started elsewhere and spread to the batteries.
“The ship is burning from one end to the other … everything is on fire about five metres above the water line,” the ship’s captain, Joao Mendes Cabecas, told the outlet.
Experts are now going to be called out to help stop the blaze, as burning lithium-ion batteries can be difficult to stop. Lithium-ion battery fires often require dry chemicals or total flooding of the battery with water to stop.
According to a study done in 2013 by the German Federal Ministry of Transport, Building, and Urban Development, the batteries burn extremely hot and produce noxious gases.
“In the event of a lithium ion battery catching fire, it is important to note that such a fire reaches very high temperatures, produces toxic gases and is inextinguishable,” the report concluded.
Fires caused by the batteries – or which they are caught up in – have become a major concern for international shipping entities, particularly as electric vehicles become more affordable and popular among consumers.
Office for National Statistics finds ‘no significant change’ in turnover and jobs in low-carbon and renewable energy sector
The UK’s low-carbon and renewable energy economy has failed to grow since 2014, according to official data showing a fall in the number of green jobs.
In a blow to the government’s pledge to boost net-zero employment opportunities, the Office for National Statistics said its latest figures, covering 2020, showed “no significant change” in turnover and job numbers in the sector compared with six years earlier.
Employment in the low-carbon and renewable energy economy – which includes manufacturing, energy supply and construction – fell by about 28,000 across the UK over the period, to just 207,800. Among the steepest declines were in factories producing energy-efficient products, onshore wind, and solar energy.
Trade unions raised questions over the government’s plan to boost Britain’s low-carbon economy after years of limited progress. Frances O’Grady, the TUC general secretary, said the UK had an opportunity to be a pioneer on the path to net zero. “But we will miss out on these opportunities if ministers do not step up public investment and action. And we could see existing jobs lost to other countries who modernise their industry faster,” she added.
Although the latest snapshot includes the first year of the coronavirus pandemic – when the British economy plunged into the deepest recession for 100 years – the figures show that in 2019, before the health emergency struck, green business turnover also fell compared with a year earlier.
According to the latest data, the sector with the largest growth in jobs was in low-emission vehicles and infrastructure, where employment more than doubled to 19,100. However, this was not enough to offset bigger falls elsewhere, including a decline of more than a quarter, or 32,000, in the number of jobs in energy-efficient product manufacturing.
The number of green businesses operating in the UK fell by 13% over the six-year period, while the combined turnover for the low-carbon economy fell by almost 6% to £41.2bn.
The ONS said the fall in turnover was largely driven by the energy-efficient products and low-emissions vehicles sectors. The majority of businesses in the low-carbon and renewable energy sectors are in manufacturing and construction, both of which suffered a downturn in 2020. However, it said employment should have been less affected than turnover because the figures included staff on furlough.
While green sectors including offshore wind have recorded substantial growth in recent years, with a sharp rise in renewable energy production, critics argue that much of the activity has been driven by foreign companies, with a reliance on the UK importing turbine blades and components manufactured abroad.
Boris Johnson announced an ambition in late 2020 to create 250,000 green jobs across the country through a 10-point plan, as part of a wider government drive to hit net zero and embed a green recovery from the coronavirus pandemic.
Ministers are seeking to encourage the growth of green jobs in sectors such as offshore wind, including through the creation of freeports in an attempt to boost investment and jobs in the low-carbon economy.
However, experts and campaigners have warned the government’s net zero plans lack the required ambition and are not backed up with adequate funding from the Treasury, instead relying on the private sector.
EXPRESS readers have had their say on the recent calls by Lord Frost and other Tory MPs to lift the ban on shale gas extraction in the UK – with a huge 90 percent agreeing the ban should be lifted.
Express.co.uk launched a survey on Monday asking our readers: “Should the UK ban shale gas extraction after Frost’s Brexit warning?” The results today showed a huge majority wanted the ban lifted.
It came after Lord David Frost and more than 30 other MPs urged the Prime Minister to end the ban on shale gas extraction.
The poll, published on February 14 and open for almost four days, received a huge 5,265 responses from Express.co.uk readers, with 90 percent – 4,758 responses – stating the ban should be lifted.
Just 493 – 9 percent – of voters said the ban should remain in place, while 14 people said they did not know.
The call comes after the only company to frack for shale gas in Britain was ordered to seal off their shale gas wells near Blackpool in 2019.
In a letter addressed to the PM, Lord Frost and other MPs urged Boris Johnson to end the ban on fracking, which they claim could prevent future energy crises like the one the country is currently experiencing.
In a joint letter to the PM, the group pressured him to “reverse this moratorium” which has prohibited the mining of shale gas since 2019.
The letter reportedly argues that lifting the ban would “allow us to combat the cost of living crisis, level up, create jobs, opportunity and a renewed sense of community in the north, improve our energy security, reduce our reliance on imported gas, stabilise energy and achieve net zero without increasing the cost of living for already hard-pressed working families.”
Lord Frost said reversing the fracking ban would herald a “British energy renaissance”…..
The Conservative rebels blame government’s green policies for cost of living crisis
A group of backbench Conservative MPs sceptical of the government’s net-zero targets have launched a campaign that threatens to derail the UK’s green agenda.
The Net Zero Scrutiny Group (NZSG), comprising around 20 Tory MPs and peers, have tried to “link the government’s net-zero agenda to the cost-of-living crisis”, The Guardian reported, and are calling for “cuts to green taxes and an increase of fossil fuel production”.
Critics have accused the group of attempting to drag climate policies into a “culture war” – a “dangerous new tactic” by “those opposed to addressing the ecological emergency”, Michael Mann, author of The New Climate War, told the paper.
The group was set up last summer by Tory MP Craig Mackinlay, who quickly enlisted fellow Conservatives including serial agitator and “self-described Brexit hardman” Steve Baker, said The Guardian. Both Mackinlay and Baker are also members of the eurosceptic European Research Group (ERG).
The NZSG “says it accepts the fundamental facts of the climate emergency and the need to reduce emissions”, the paper continued. But the Tory rebels have argued that the government’s net-zero plans are “too bold, dreamed up by out-of-touch elites, and would impoverish working people, ‘making them colder and poorer’”.
The group gained “minimal traction” in the run-up to the Cop26 climate summit in Glasgow last year, but have reportedly “sensed an opportunity” in recent weeks as gas prices and other living costs have soared.
According to The Guardian, Mackinlay and Baker “stepped up their recruitment campaign in the corridors of Westminster ahead of the Christmas break”, targeting the 2019 intake of Tory MPs. The duo was said to have showed colleagues “alarming graphs and data about the cost-of-living crisis”, and to have argued that the government’s environmental targets were becoming “politically toxic” and that the “obsession with the green agenda was putting their slim majorities at risk”.
Who are the members?
The group’s members kicked off 2022 by sending a letter to The Sunday Telegraph calling for an end to green levies and more fossil fuel extraction.
Alongside Mackinlay and Baker, the letter was signed by former work and pensions secretary Esther McVey; Tory peer Peter Lilley; ex-schools minister Robert Halfon; Julian Knight; Anne Marie Morris; ERG member Andrew Bridgen; David Jones; Damien Moore; Andrew Lewer; Karl McCartney; Marcus Fysh; Philip Davie;, Adam Holloway; and Craig Tracey. The signatories also included 2019ers Scott Benton, Mark Jenkinson, Greg Smyth and Lee Anderson.
Baker is also a trustee of the Global Warming Policy Foundation (GWPF), a group described by The Guardian as a “prominent publisher of material questioning the consensus on climate science” that was launched by former MP and climate change-sceptic Nigel Lawson in 2009.
How could the NZSG impact green agenda?
Baker told Sky News last month that he believed that the campaign against net zero could be “bigger than Brexit” and was addressing a key “moral issue”.
“I genuinely believe that when the full costs of net-zero start hitting us, if people have never been given a choice at the ballot box, we could end up with something bigger than the poll tax, certainly bigger than Brexit, because the numbers of people hit by it and their inability to cope will be huge,” he said.
“I am sick to death of people talking to me about food and fuel poverty, and then piling costs on the poor. This is a fundamental moral issue.”
More recently, NZSG chair Mackinlay told The Telegraph that the group could “play a similar role to the Covid Recovery Group of lockdown sceptics who defied Boris Johnson on Plan B measures, or indeed the Tory Brexit rebels under Theresa May,” according to the paper’s political reporter Dominic Penna.
Nigel Farage has also drawn comparisons between net-zero targets and what he calls the “European question”, calling for a referendum on the issue on GB News.
“It’s been imposed on people without any public discussion,” he said. “There is no difference between the political parties, no difference between them, on any of this stuff.”
But Conservative Environment Network member Chris Skidmore “said warnings of social unrest over net zero were irresponsible and populist”, Sky News reported.
Boris Johnson believes that his government’s net-zero strategy is “the answer to the energy price crisis”, the broadcaster added, and that “the switch to renewables and nuclear will eventually provide a greater degree of energy sovereignty and reduce exposure to volatile fossil fuel prices”.
“Anyone who thinks high energy bills are the result of ‘green crap’ obviously hasn’t been paying attention to the price of crude oil,” wrote The Telegraph’s associate editor Ben Wright. In fact, “analysis suggests that 90% of the increase in household energy bills over the past year has come from the increase in gas prices alone”.
“Opponents of net zero” argue that the UK’s failure to invest in the North Sea reserves, a ban on fracking and shutting down storage facilities gas has “increased our vulnerability” and left us reliant on Russian oil, Wright continued. But “fans of net zero” argue that “we haven’t moved far or fast enough on the development of renewables” and that “increased domestic gas production would simply feed into global markets where the price is open to manipulation”.
“Both sides have a point,” Wright concluded. But “the key is getting the balance right between running down fossil fuel dependency and developing renewable sources of energy. It can’t be an either/or proposition.”
15) Tom Harwood: Cheap energy is the answer to inflationary woes, so why are we sitting on a 21st century goldmine of it? Daily Mail, 16 February 2022
Against a backdrop of inflationary pressures from all angles – from construction to groceries to gas bills – petrol and diesel prices are the latest pinch point soaring to record highs.
In the last few days petrol prices have seen hikes to 148.02p a litre, and on Thursday diesel reached a new record per litre high of 151.57p.
Consumers are feeling the pinch and wage growth is unlikely to catch up. With the Governor of the Bank of England advising Brits to not ask for pay rises this year, what are we to do?
While horrendously out of touch and overwhelmingly unlikely to be heeded, the call to not raise wages without a corresponding rise in productivity makes sense, all that more cash for the same amount of production would do is push inflation higher still.
Prices rise, people get paid more to afford those prices, and in response prices rise again. It’s an inflationary trap.
No, the only way to sort this cost of living crisis is to deal with the supply side, not simply inflate the demand side of the equation.
This country needs to end years of dither, delay, and contradictory policy destroying our energy market.
Fixing energy will not fix inflation in general – after all the United States which has had far wiser energy policy under successive presidents is still seeing inflation breach 7 per cent – but it will help avoid the horrific choices some are being forced to make, between heating and eating.
After all, energy is connected. If we have a greater supply of electricity from other sources, be they hydro, solar, nuclear, or natural gas, there will be less demand for coal, oil, and diesel in electricity generation. And less demand means lower prices. Cheaper fuel at the pumps.
Yes, by delivering a powerful energy generation sector in the UK, not only may gas and electricity bills fall but petrol and diesel too. These are just the start of the myriad positive spillover effects of cheaper energy.
Yet as things stand, for thirty years politicians have ducked the decision on nuclear. While Margaret Thatcher approved the construction of three new nuclear power stations during her time in office, John Major and Tony Blair didn’t approve one between them. Brown, Cameron, and May then prevaricated.
The best time to construct a new wave of nuclear power stations was more than a decade ago. The second best time is now.
But despite being the cleanest and most powerful source of energy we have yet devised, nuclear takes time. If we are to embark upon an enormous nuclear building crusade this decade, there are still years to fill before we see the benefits.
And that is where hydraulic fracturing, better known as fracking, comes in. The UK sits upon a wealth of natural gas, a 21st century goldmine. The moratorium currently imposed upon extraction has done nothing but lower global supply and therefore bolster the hand of Mr. Putin.
It has done nothing to reduce UK CO2 emissions either, as we still rely on considerable amounts of expensive gas from other countries.
If politicians were to lift their self destructive moratorium, prices could come crashing down, as they did in the United States.
When the US got fracking, particularly under President Obama, natural gas production in the USA rose by around 60 per cent. In the same timeframe, prices which had previously been rising have since fallen by 50 per cent.
This is not rocket science, the UK could repeat this success story. It could do so to not only bring down energy prices as we transition to a much bigger base of nuclear, but also generate the tax revenue to help fund the construction cost of that nuclear revolution as it unfolds.
The solutions are there, for the pound in our pocket and the climate too. All they need is the political will to deliver.
SIR – Jeremy Warner is wrong to say that Cuadrilla’s shale gas exploration wells in Lancashire “produced no burnable quantity of gas at all” (Business, February 16).
Each of our two Lancashire gas exploration wells flowed very high-quality natural gas to surface from just a handful of fractures completed in the underlying shale rock. The limited number of fractures was due to the regulatory requirement to halt operations any time micro-seismicity induced by fracturing exceeded just 0.5 on the Richter scale. A study by Liverpool University has equated the impact of a 0.5 micro-seismic event to sitting down on an office chair.
Just 10 per cent gas recovery from the Bowland shale could supply 50 years of current UK gas demand. To produce the same amount of energy as a single 10-acre shale gas site of 40 wells would require a wind farm some 1,500 times that size or a solar park nearly 1,000 times the size. Shale gas is by far the best option to minimise land use per energy produced.
At current UK gas prices, the value of just 10 per cent of the in-place British resource would be approximately £3.3 trillion. The potential tax take from producing this could be close to £200 billion. Imported gas produces no tax, no jobs and higher carbon-dioxide emissions.
Gas from the existing Cuadrilla wells could and should be flowing to local domestic consumers within 12 months of equipment remobilising to site.
The case for shale gas is strong and fundamentally logical. The Government needs to lift the moratorium urgently.
Francis Egan Chief Executive Officer, Cuadrilla Resources Limited Manchester
CLIMATE change envoy Alok Sharma has come under fire for lavishing £125,000 of taxpayers’ cash on a private jet to China.
Mr Sharma, president of the COP26 climate summit, took the trip in a bid to persuade Chinese officials to agree targets for limiting greenhouse gas emissions.
Accommodation, meals and visas added another £18,000. In total he flew 150,000 miles to 37 countries at a total cost of £250,000 in less than a year to gain support for the agreement signed in Glasgow last November.
Benny Peiser, of campaigners Net Zero Watch, said the private jet “was completely wasted given that China’s assurances to Alok Sharma were dropped just before the COP deal was signed so that they can continue burning coal forever.”
China and India vetoed a pledge to scrap fossil fuels for the phrase “phase down” instead.
Whitehall said there were no scheduled flights to the Chinese city of Tianjin, forcing Mr Sharma to book a private jet.
#AceNewsReport – Feb.08: Germany’s coalition government, which includes the Green Party, had planned to abolish the renewable energy surcharge on electricity bills from 1 January 2023, but due to the energy crisis is considering cutting the green levies earlier to ease the strain of rising energy costs on households.
According to news reports, even the German Economics and Climate Protection Minister Robert Habeck (Green Party) is supporting the early end of green levies on energy bills.
Direct subsidies for UK renewable energy investors – via the Renewables Obligation, the Feed-in Tariff and the Contracts for Difference systems – run to £10 billion a year, but there is a further £2 billion from the high system costs renewables bring to the grid.
Net Zero Watch has repeatedly called on ministers to remove these renewable energy subsidies from energy bills to help reduce mounting pressure on the general cost of living.
Cutting green levies from energy bills will also allow the Treasury, in the medium-term, to buy back these subsidy entitlements at a discount, and eventually cease to provide green energy subsidies in any form. Taxpayers cannot be expected to carry this burden in the long-term.
Dr Benny Peiser, Net Zero Watch director, said:
Boris and Rishi should, for once, follow the German example where even the ruling Green Party is in favour of scrapping green levies in order to ease the rising cost burden for ordinary families. If Boris Johnson’s government can’t manage what even the Green Party in Germany is willing to do, what’s the purpose of the Conservatives?”
With mounting concern about the true cost of the Government’s Net Zero project the Global Warming Policy Forum (GWPF) has publishing a realistic alternative that reduces CO2 emissions without inflicting astronomical costs on consumers.
#AceNewsReport – Feb.08: SHENZHEN, Feb. 7 (Xinhua) — China’s Hualong One, a domestically designed third-generation nuclear reactor, has been confirmed adequate for use in Britain, said the designer, China General Nuclear Power Corporation (CGN), on Monday.
#AceDailyNews says the reactor has met the standard of the Generic Design Assessment (GDA), according to a joint statement issued on Monday by the British Office for Nuclear Regulation (ONR) and the Environment Agency (EA) Xinhua News Agency
Before being put into use, the new technology must pass the assessment led by the ONR and the EA to determine its safety and environmental impact.
ONR has issued a Design Acceptance Confirmation (DAC) and EA has issued a Statement of Design Acceptability (SoDA) to Hualong One.
The CGN and French state-owned power giant EDF signed deals with the British government in September 2016 on building three projects in Britain. The project based in Bradwell, Essex, is expected to use the Hualong One technology.
#AceNewsReport – Feb.03: The agency wants $156.2 million over three years to 2025 — a 66 per cent jump on the previous period – to operate the main electricity market in Western Australia.
#AceDailyNews says according to AEMO News Report: calls for funding hike as renewable energy levels send management costs soaring: Following another year in which record amounts of renewable energy were added to the national electricity mix, the Australian Energy Market Operator (AEMO) is pushing for a big hike in funding to oversee one of its key jurisdictions.
In a submission to WA’s economic watchdog, the AEMO said it needed the extra funds to help cope with the increasing complexity and volatility in the market as more and more renewable energy flooded onto the system.
“While the growing level of variable renewable generation is helping the [WA system] transition towards clean, low-cost generation, it can pose operational challenges,” it said in its submission.
Much of the outlay was on back-up capacity — provided either by power plants that could generate electricity or major users who could scale back consumption when needed — for times when the grid was “under stress”.
The AER noted that the so-called reliability and emergency reserve trader scheme had been in place for a number of years but had rarely been used until recently.
It said the scheme had now been invoked in all the biggest states, including South Australia, Victoria, New South Wales and Queensland, while its total cost between 2017 and 2020 had reached $110m.
The regulator noted these interventions had “risen sharply in recent years” as the AEMO ordered some generators, such as gas-fired power plants, to stay on while telling others, including wind and solar farms, to back off at certain times.
These interventions had come “at significant cost to consumers”, the AER said, with the AEMO shelling out $50m in 2018 and 2019 to compensate affected generators.
Despite efforts to control these costs, the AER noted they were higher still in 2020 at $66m.
“Aside from formal compensation, the use of constraints or directions penalises consumers by driving up wholesale electricity prices,” the AER said in its report.
“For example, by restricting wind or solar output that might have zero marginal costs, AEMO directions may lead to dispatch from synchronous (coal- or gas-fired) generators with higher costs.”
Records tumble in renewable wave
The AEMO said the growing challenges of keeping the lights on were highlighted in its latest snapshot of the market, which showed record volatility in the three months to December 31.
Minimum demand for electricity from the grid fell to new lows in SA, NSW and Victoria as cooler weather subdued demand and growing amounts of rooftop solar pushed out fossil fuel-fired generators.
Across the NEM, the average output of renewable energy also increased from 31.6 per cent to 34.9 per cent, with maximum output reaching as high as 61.8 per cent for a short time on November 15.
At the same time, the market body noted its own costs “remained elevated” for the quarter as it scrambled to ensure there was enough back-up to meet demand when renewable generation fell away or when there were other shocks to the system.
Synergy, the WA state-owned power provider that would be up for the biggest share of the AEMO’s cost increase in the west, declined to comment.
The Australian Energy Council, which represents big electricity providers, said the AEMO’s spending plan reflected the “dramatic shift in the energy mix and significant government reforms”.
But the council also said it was critical to ensure the AEMO’s spending was transparent to ensure it was kept to a minimum.
“WA’s Economic Regulation Authority … plays an important oversight role [in the WA market] and we expect to make a detailed submission once the ERA has released its draft determination,” a spokesman said.
#AceNewsReport – Nov.25: Australian Energy Market Commission’s Residential electricity price trends report 2021: AEMC Chair Anna Collyer said the report shows that, based on current trends, prices per kilowatt hour are likely to be under 26c p/kWh by June 2024, the first time since 2016/17……
#AceDailyNews reports on the AEMC’s 2021 annual residential electricity price trends report examines the direction household electricity prices will take over the next three years. It finds that lower wholesale costs, and reduced environmental costs in most regions, are continuing to drive overall prices down…
To access a media release and infographic for your jurisdiction:
ABC NEWS REPORT: National energy market report details expected power bill price drops across Australia with Queensland leading the way in price drops
25 November 2021:
“This illustrates how integrating renewables in a smart way makes it possible to have both lower emissions and lower costs for consumers,” Ms Collyer said.
“We can now see far enough into the future to be confident that power prices paid by consumers will continue to trend downwards over the next three years, despite the staged exit of Liddell power station in 2022 and 2023, one of the biggest coal-fired generators in the national electricity market.
“But while wholesale costs and environmental costs are trending lower, we are starting to see increases in the cost of network investments, and this is likely to accelerate over the next decade as more network investment is required to connect dispersed new generation to the grid.
“There are also regional differences across states and territories in the national electricity market that will affect price outcomes. And what energy offer you have, how much you use and whether you also have solar or gas will also affect your bill.”
Wholesale costs are expected to fall by about $92 between FY20/21 and FY23/24, building on falls during FY20/21. Wholesale costs represent about 35% of the representative customer’s bill across the national energy market.
Network costs are expected to increase by about $31 out to FY23/24, equally spread across transmission and distribution networks.
Environmental costs are expected to drop by $16 out to FY23/24 due to a decrease in large-scale renewable energy costs as more renewable generation comes online. After seeing these costs mostly increase over the past decade, they are projected to drop in FY22/23 and FY23/24.1
Across the national electricity market jurisdictions from FY20/21 to FY23/24:
South East Queensland electricity prices are estimated to fall by 10% or $126 (an annual average drop of -3.6%)
South Australian electricity prices are estimated to fall by 2% or just over $35 (an annual average drop of -0.7%)
Victorian electricity prices are estimated to fall by 8% or about $99 (an annual average drop of -2.6%)
NSW electricity prices are estimated to fall by 4% or about $50 (an annual average drop of -1.3%)
ACT electricity prices are estimated to rise by 4% or $77 (an annual average increase of 1.3%)
Tasmanian electricity prices are estimated to fall by 6% or $125 (an annual average drop of -2.1%).
Ms Collyer said the report shows that prices are expected to fall slightly in FY21/22, increase by around $20 a year in FY22/23 as Liddell exits the system, and then fall again as lost capacity is replaced by a combination of solar, wind, gas and batteries.
“While we have just under 2,500MW of generation expected to exit the grid over the next three years, there are almost 5,500MW of committed new large-scale generation and storage projects coming online over the same time period,” Ms Collyer said.
“This is in addition to 4,130 MW of new rooftop solar PV capacity, which will also influence prices by lowering demand and through exports.”
“This diversity of generation and storage puts us in a strong position to manage the forecast retirement of Liddell in NSW and the closure of gas fired generators in SA and Qld. Understanding what’s driving prices highlights the importance of being smart in how we connect resources to the grid and ensure the back-up needed for a secure supply, so the benefits of low cost and low emission generation aren’t eroded,” she said.
“Everything we’re doing at the AEMC and ESB is about making the most of renewables. That means maximising the benefits through reforms to distributed energy resources such as solar, minimising the emerging costs of planned network investments to connect renewables to consumers, while ensuring we have electricity when and where we need it to keep the lights on.”
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Household power bills are predicted to continue falling in the coming years, despite the closure of major power stations including Liddell power station in New South Wales.
It forecasts an average national drop in annual bills of $77 by 2024.
AEMC chair Anna Collyer said power bills were expected to rise slightly, by about $20 in 2022/23, as Liddell closed down.
“Prices are expected to … fall again as lost capacity is replaced by a combination of solar, wind, gas and batteries,” Ms Collyer said.
“While we have just under 2,500 megawatts (MW) of generation expected to exit the grid over the next three years, there are almost 5,500MW of committed new large-scale generation and storage projects coming online over the same time period.
“This is in addition to 4,130MW of new rooftop solar PV [photovoltaic] capacity, which will also influence prices by lowering demand and through exports.”
Queensland leading the nation
South-east Queensland is predicted to see the biggest price drop, with annual bills falling by 10 per cent ($126) by 2024, to reach their lowest level in more than a decade.
The report predicts the price falls will be driven by new solar and wind farms and new battery storage coming online in the state.
“Significant new generation has been committed in south-east Queensland,” Ms Collyer said.
“Wind farm projects at Kennedy Energy Park and Kaban, nine solar projects … and the Wandoan battery.”
A price drop of $50 by 2024 is forecast for New South Wales, $99 in Victoria, $125 in Tasmania and $35 in South Australia.
A net increase of 4 per cent, or $77, is forecast by 2024.
Ms Collyer said the modelling showed prices in the ACT increasing by $99 this financial year, and by $123 the following, before falling by $145 in 2023/24.
“A comparatively large number of ACT consumers, 28.7 per cent, are still on standing offers rather than cheaper market offers so there are savings available to households if they shop around for a better deal,” she said.
The report said the price rise would be driven by rising wholesale and network costs.
It said environmental costs in the ACT would also increase due to the costs of large scale Feed-in Tariff Schemes.
Closures in South Australia
A modest drop of $35 in South Australia is predicted despite the closure of the Torrens Island and Osbourne units over the next few years.
“This illustrates how integrating renewables in a smart way makes it possible to have both lower emissions and lower costs for consumers,” Ms Collyer said.
South Australia is set to be hit by higher network investment costs, which are predicted to accelerate over the next decade to cope with the steep rise in power being returned to the grid from households.
The report does not include the Northern Territory or Western Australia.
“They’re not part of the national electricity market, they both have quite different markets, and in each case, the government asked us to not pursue the price trends in those regions because it wasn’t as meaningful for their customers,” Ms Collyer said.
#AceNewsReport – Nov.12: Orica’s plant on Newcastle’s Kooragang Island manufactures vast quantities of ammonium nitrate to make explosives for the Hunter Valley’s coal mining industry…..
#AceDailyNews says according to ABC News Report: Orica’s Newcastle plant to slash greenhouse gas emissions with new technology
Each year the plant’s chemical process to make nitric acid generates about 1,900 tonnes of the potent nitrous oxide (N2O), a greenhouse gas 300 times stronger than carbon dioxide (CO2)…………Orcia says its new emissions reduction technology will reduce nitrous oxide emissions by 92 per cent.
“Basically at the end of our [nitric acid] plant we install this catalyst which turns the nitrous oxide that we generate from our manufacturing process into nitrogen and water,” the plant’s general manager Paul Hastie said.
“Very similar to how you have a catalyst on the exhaust pipe of a petrol-powered car, which reduces the emissions generated by the car’s engine.”
NSW government gives $13m grant
The project will be funded by a $25 million loan from the federal government’s Clean Energy Finance Corporation and a $13 million grant announced today by NSW Environment Minister Matt Kean.
“This is the first of many major projects to be funded out of our $750 million Net Zero Industry and Innovation Program,” Mr Kean said in a statement.
“Orica’s new emissions reduction system is expected to cut 567,000 tonnes of carbon dioxide equivalent each year, which is equal to emissions from 50,000 Newcastle homes.
“This is a massive abatement at one of the state’s largest heavy industrial sites, which will help New South Wales meet its target of halving emissions by 2030.”
The project is expected to be completed by early 2023 and cut overall emissions from the Kooragang Island site by 48 per cent.
Keith Craig from the Stockton Community Group said the announcement was welcome news that was long overdue.
“If you’re looking at greenhouse gas emissions it’s the worst in Newcastle and globally ammonia plants put out 1 per cent of the world’s entire greenhouse gases,” Mr Criag said.
“Plus, the ammonium nitrate product is going purely to the coal industry which is creating so many more problems globally when you burn that coal.
“So the whole scenario has concerned the community for many years.”
CO2 and PM2.5 concerns
The plant is also a significant source of carcinogenic PM2.5 particles, which a 2016 CSIRO study found were at elevated levels in the nearby suburb of Stockton.
Orica was recently given development approval to install scrubbers in its prill towers which will capture 99 per cent of the fine particles.
Mr Hastie said that project should be completed by the end of 2023.
The plant also produces a significant amount of carbon emissions from the manufacture of ammonia.
Orica is working with Mineral Carbonisation International to develop a pilot plant that it hopes will capture its CO2 emissions and reuse them to make products like plasterboard and cement.
The Orica company more broadly has committed to a 40 per cent reduction in emissions by 2030 based on 2019 levels.
#AceNewsReport – Sept.24: The company said the solar farm, to be built near the NT highway town of Elliott, would now supply 17 to 20 gigawatts, up from the previous plan of 14 gigawatts.
#AceDailyNews says Massive NT solar farm a step closer as Sun Cable dramatically increases its capacity after they announced on Thursday it had received crucial approval from the Indonesian government to allow an undersea cable to run through its territorial waters to Singapore.
The storage system, described as the world’s largest battery, has also been increased in size to 36-42 gigawatt hours, from an earlier goal of 30 gigawatt hours.
NT Chief Minister Michael Gunner said the project will inject $8 billion into the Australian economy, with “most of it being spent right here in the Northern Territory”.
“Sun Cable have established an office in the Territory and have employed more than a dozen Darwin firms for initial works,” he said.
Sun Cable CEO David Griffin told ABC Darwin the increased costs reflected the larger capacity of the Australia-Asia Powerlink’s solar and storage systems.
“It’s a significant increase, but we’ve done that because that enhances the returns for the project,” he said.
“We’re better meeting our customers’ demand for the volume of electricity.”
Mr Griffin said the new development would not require more land than the 12,000 hectares already identified near Elliott, 636 kilometres south of Darwin.
“The technology — both solar and battery storage — continues to evolve rapidly and with that, it becomes more efficient [and] more energy-dense so you need less land per megawatt, for instance,” he said.
“So, we can install a much larger project on precisely the same amount of land.”
The Australia-Asia Powerlink is expected to channel renewable electricity to a solar battery in Darwin, before travelling by submarine cable 4,200km to Singapore.
If the project goes to plan, it will provide Singapore with up to 15 per cent of its electricity needs from 2028, the company said.
It will also deliver total carbon emissions abatement estimated at 8.6 million tonnes of CO2e per year.
Indonesia a ‘critical component’
Indonesia’s approval of a sub-sea survey permit to run a cable through its waters has brought the project a step closer to fruition.
“Indonesia is a critical component of the project’s future success,” Mr Griffin said.
“Most of our sub-sea route passes through Indonesian waters and it is an archipelagic state so they take the consideration of where this structure is installed in their waters very seriously, so it interfaces well with their broader national plans,” he said.
In return, Mr Griffin said Sun Cable would invest about $US2.5 billion ($3.44 billion) in Indonesia.
“That will take the form of equipment procurement through items such as transformers, switchgear, land-based cables,” he said.
“And importantly — given we’re developing the largest battery in the world — it’s an opportunity to effectively underwrite the establishment of a new stationary battery manufacturing capability in Indonesia.”
Change in location
In August, Sun Cable notified the NT government of plans to reroute the project’s overhead transmission lines to Gunn Point instead of Middle Arm.
“The original plan was to connect to the Darwin network in Middle Arm and then that would be the start of the submarine cable route to Singapore,” Mr Griffin said.
“However, there are a lot of competing interests in Darwin harbour.”
Mr Griffin said the Gunn Point site “has easier access to the sea and we can still access the Darwin grid to supply the 800 megawatts of capacity that we want to deliver to Darwin.”
Sun Cable is backed by billionaires Mike Cannon-Brookes and Andrew “Twiggy” Forrest.
Although the solar farm has taken a big step forward, there are still some barriers.
Concerns have been raised about the environmental impact of clearing out that corridor of bushland.
Sun Cable is currently undertaking an environmental impact assessment, which Mr Griffin said will be released at the end of the year.
“It is a degraded area in that it has been a pastoral lease for a very long time,” Mr Griffin said.
“We have already undertaken extensive flora and fauna surveys on that land.”
It is anticipated that approvals will be determined at the end of 2022.
Then, on Thursday night, monumental rulings – one by a Dutch court, the other by global investors – threatened to change the course of three of the world’s biggest fossil fuel suppliers.Gas-led awkwardness for the government
The ruling, which Shell plans to appeal, was unprecedented with the judge dismissing Shell’s argument that governments alone were responsible for meeting the Paris Agreement targets.
Across the Atlantic later that very same night, shareholders in two of the world’s biggest petroleum groups forced management to step up action on climate change.
Exxon Mobil was stunned when investors voted two representatives of a small activist hedge fund to the board of the energy giant, vowing to force the company to diversify away from fossil fuels. In a separate move, an overwhelming majority of Chevron investors voted in favour of setting emissions reductions targets for the company.
The Callide C explosion was an accident. There were unconfirmed reports that a rotor blade broke through its casing, which caused the explosion and the subsequent fire. But no findings have been made and human error and other causes are being explored.
As a result, fossil fuels will remain in the mix for the medium term until battery storage becomes cheaper.
Below is the scheduled shutdown of our coal-fired fleet. Many, however, are being retired early as energy companies see no future in the vast outlay to keep them operational, let alone investing $5 billion-plus in coal-fired plants that are likely to be obsolete within a decade.
It’s interesting to contrast the reaction from our leaders last week with the 2016 blackouts across South Australia when a fierce storm took out towers, forcing most windfarms shut down and an outcry from coal lobbyists.
Oddly, there’s been little if any talk this time of the unreliability of coal-fired generation.
Baseload, however, is not a virtue. Contrary to popular belief, it is not the minimum required amount of electricity to keep the lights on.
It’s the opposite. It instead describes one of the fundamental shortcomings of coal-fired electricity generators and the inflexibility of steam engines. You can only turn them down to a certain point – the baseload – beyond which, you have to shut them down. They then take weeks to fire back up.
As a result, you had to build enough coal-fired generators to supply just enough electricity, usually at night, when they were powered right down to baseload.
Bear that in mind the next time you hear a politician extol the need for more baseload power.
What is required is dispatchable energy, that can easily be switched on and off. Renewables fit that bill. So too does gas. But it has become too expensive. And even though it has less emissions than coal, the shift towards an accelerated reduction in emissions is likely to leave it with little future.
It holds large interests in some of our biggest natural gas projects off the coast of Western Australia including the North West Shelf (16.7 per cent), Gorgon (25 per cent), Browse (27 per cent) and the southern Queensland development Arrow (50 per cent).
The latest ruling adds to a trend from courts in developed nations to switch the onus for action on climate change to corporations. Last week’s decision compels Shell to cut emissions by 45 per cent by 2030, almost double the company’s plans.
While Dutch law doesn’t extend to Australia, the size of Shell’s Australian interests virtually guarantee that it will be closely examining its operations. Even if the ruling is overturned on appeal, actions of this kind are likely to ramp up, ensuring most major corporations either accelerate their exit from fossil fuels or, at the very least, deploy future investment funds in clean energy.
Global leaders may have turned climate change from a scientific study into a political issue for their own ends. But courts, shareholders and insurance companies are now in the ascendancy, transforming the crisis into a legal and financial issue.
Exxon and Chevron out of gas
Few had ever heard of Engine No 1 until last week. But the tiny hedge fund has been waging a battle against the chief executive of ExxonMobil, Darren Woods, and the board for most of this year.
Formed late last year by tech investor Chris James, its interests primarily are focussed on improving returns for its investors while trying to save the planet. Unlike the altruistic motives of Friends of the Earth, however, Engine No 1 is fighting climate change on behalf of capitalists.
Its successful attack against Exxon was focussed on the company’s poor financial performance and its failure to adapt to a decarbonised world.
Last week, it managed to gain two board seats and, with the battle ongoing, could end up with as many as four in a humiliating defeat for Mr Woods.
It began the fight with just 0.02 per cent of the shares in Exxon last December. But its arguments about performance and Exxon’s sad history of misinformation and lobbying when it comes to climate change, clearly resonated with shareholders.Is this Australia’s next light bulb moment?
Meanwhile, more than 60 per cent of Chevron investors voted to set targets to reducing emissions, including those of customers.
Like Shell, ExxonMobil has an interest in the massive Gorgon gas project off the coast of Western Australia while Chevron has interests in Gorgon and the North West Shelf. Each company ranks among our biggest gas exporters.
Gas always was considered a transition fuel; the short stop between coal and renewables.
With three major multinationals now under pressure to exit or at least scale back, the transition may have become far more transitory. And the gas-fired recovery may well run out of steam before it even starts.
#AceNewsReport – Apr.29: An energy expert has hit out at a new proposal to charge solar panel users for exporting their excess electricity, labelling it a “sun tax” and arguing it will cost solar households more than is being estimated by the independent statutory body pushing the changes:
Fears proposal to charge households with solar panels to export electricity will kill demand for solar energy
“ We’ve modelled different charges from $10 to $100, depending upon the size of your solar system,” Australian Energy Market Commission chief executive Benn Barr said.
The plan has been controversial because for decades solar owners have been paid what is known as feed-in tariffs, where they sell their surplus energy back into the electricity grid. This proposal to charge them a fee flips the status quo on its head.
The AEMC argued a change was necessary because the current system is unsustainable as the huge uptake in household solar has overloaded the grid, and the alternative would mean more solar users being blocked from exporting their energy.
Mr Barr said the pricing model would be flexible, up to individual power companies to determine, and would still allow for households to be paid for sending energy back to the grid when it was in demand.
“You get a good return from solar. And it’s not going to make it uneconomical for customers to put it on their roof,” Mr Barr argued.
But a new analysis by the Victoria Energy Policy Centre at Victoria University has challenged the proposal by the energy market rule maker, saying the cost to solar households will be greater than predicted.
“We estimate that if the AEMC’s proposals are implemented, they will reduce the income that most typical households get from exporting solar by 80 per cent,” said the centre’s director, Professor Bruce Mountain, who conducted exclusive research on the proposal for 7.30.
“Essentially, they will get the equivalent of a hamburger a year as their income from rooftop solar sales. I think that’s very likely to bring pressure in the rooftop solar market, and customers will be less interested in it,” Professor Mountain argued.
They predict that, under the new pricing system, the money made from having solar panels and using feed-in tariffs (selling solar-generated electricity back to the grid) for an average household would go down from $970 to $900 a year — a 7 per cent reduction.
But Professor Mountain, who is an energy economist, disagreed with the commission’s initial figures and their final sum, saying his analysis of publicly available data and calculations found the average amount of money households would make per year would go from $129 down to just $29 — an almost 80 per cent reduction — under the AEMC proposal.
“The economics of what they are proposing is not reasonable. It’s not in the public interest,” he told 7.30.
However, Mr Barr disagreed.
“I think there’s a misunderstanding that somehow this is a blanket charge which we’re setting that’s applied across the board — it’s not,” he said.
“It’s actually giving poles and wires businesses the option to go out and consult and design these charges.”
While the commission said it was designed to encourage more households to get solar, Professor Mountain said any charge would have the opposite effect.
“I think if these proposals take effect, I think it’s very likely that many fewer people will install rooftop solar, it will kill the golden goose,” he said.
Solar panel owners left disappointed
The proposal has not gone down well with some solar panel owners like Matt Pilsbury, who felt it was punishing them for installing the technology.
Mr Pilsbury installed solar panels on the roof of his house in Tarneit in Melbourne’s far west last month in an effort to help the environment and his hip pocket.
“We wanted to get solar panels for a while, to try to save a dollar,” he said.
He spent $8,200 after government rebates installing panels on his roof, and expected to make that money back from the feed-in tariffs that solar users have benefited from for the past decade.
But when he applied to have his new panels connected to the grid, he was shocked to find he couldn’t.
“Once we got them installed, it was to the point where we found out that we couldn’t pump back into the grid and so we couldn’t get any money back,” he said.
He says his power company told him the electricity network was full — because too many other households in the area had solar panels — and he could not export his excess solar power back to the grid.
“I’ve just been pumping energy back into the grid for free, and not saving a single dollar,” he told 7.30.
Current grid not equipped for two-way usage
Mr Pilsbury’s problem is increasingly common in the rapidly expanding city fringes where solar panel uptake is booming — and it is why change is needed, according to the AEMC.
Australia has one of the highest uptakes of rooftop solar in the world, growing from just 0.2 per cent of households in 2007 to 20 per cent now — and it is predicted to rise to 50 per cent within a decade.
“The grid, the poles and wires were set up to get power from generators to your house, not from your house, back into the grid,” Mr Barr said.
It is these problems that the AEMC is hoping to address with its proposed pricing system — by encouraging people, through payments and charges, to store solar power generated during the day with batteries, then use it at night, and to only send it back to the grid when it is required.
“By that you allow this two-way pricing, and incentives for when the power is needed. Charge up in the middle of the day when your solar is generating, and get it back into the grid at night or at 6pm when the grid needs it,” he said.
Mr Barr also argues the current system is inequitable, with solar essentially being subsidised by all electricity users through the government incentives and subsidies solar users receive.
“At the moment, the only way of solving this problem is actually building more and more poles and wires, which everybody pays for, whether you’ve got solar on your roof or not,” Mr Barr said.
But Professor Mountain disagrees with this point, saying that “this idea of traffic jams and of technical problems that put a high expense on the uptake of power by households and by businesses is just not true. It can easily accommodate these changed usage patterns”.
“Rooftop solar is a threat to network companies. It’s a threat to large energy producers. And in some cases … they’ve been seeking to neutralise that by stopping customers from getting access to the grid to export solar. And that undermines the economics of households installing solar,” he said.
Mr Barr rejects the assertion that the proposal is being pushed by network companies, and notes the proposal has been backed by groups including the Australian Council of Social Services, who said under the current system, all households were essentially subsiding the 20 per cent of the population who are solar panel users, via government subsidies.
The AEMC says its modelling predicts households who do not have solar — which is around 80 per cent of all households — would get an annual reduction of around $15 on average in their electricity bills, if the new pricing system is applied to solar panel owners.
Proposal perceived as a ‘sun tax’
Users like Matt Pilsbury feel the proposal would punish them for doing just what they had been told to do for years by the government, via public messaging and financial incentives to go green and get solar.
“There’s still people signing up every day trying to get solar panels put in and as soon as they get them they find out you’re not gonna be saving any money, it’s just costing them money,” Mr Pilsbury said.
Professor Bruce Mountain agrees, arguing any proposed change to charge solar users will be perceived as a “sun tax”.
“I don’t think it’s fair or economically sensible to be applying a tax to the 2.7 million households that have already installed solar,” he said.
“They installed solar in good faith with governments, both state and federal, that encouraged them to. They, in most cases, have funded almost all or a large part of the investment themselves.
“For governments now to tax them on it is to expropriate part of the value of investments that they made in good faith. And I think they will rightly be angry about it.”
Mr Barr disputes Professor Mountain’s analysis and said the proposal “modelled a range of options” for companies to consider.
‘”This isn’t a one-size-fits-all approach. There’ll be two years of consultation and protections for customers, including existing solar PV owners. It won’t be a blanket solution, more a package of options for customers that they can pick from depending on their individual circumstance,” he told 7.30.
“And importantly, the Australian energy regulator will need to sign off on any of those changes that they’re for the benefit of customers.”
Energy Networks Australia, the body that represents electricity transmission and distribution networks, said in a statement that as the transition to a two-way grid continues, “it makes no sense for us to continue to only charge for one-way usage”.
“The ongoing growth in household solar is a major challenge for the grid, but it is not a threat to network revenues. The independent Australian Energy Regulator sets total network revenue. This means any changes such as the introduction of export charges will not change network revenues or profits. In fact, any revenue raised from export charges will directly lead to lower network usage charges for all solar and non-solar customers.”