This is true. But for long-term things, sometimes the politics can never catch up, or the politics ride waves of support and disdain which also greatly delays progress of important projects.
Politics affect economics and vice versa. On the economic side (since this is an economics board) this news item could have been added to several threads. It could have been posted to the grid-level costs of renewables/intermittent sources thread. One also reads about the ever-decreasing cost of renewable energy sources, and yet here we read about “significant pressure through at least the end of the decade”. In another thread, one could speculate on how that price pressure will affect the ability of Germany to reach its energy transition goals in this decade.
DB2
Prices can do anything in the short-ish term. We’ve seen price increases for renewables before, I’m certain we’ll see them again. Longer term, the price of renewables is tightly correlated to manufacturing capacity. So if we want to discover the future trend of renewable prices, we should look at planned manufacturing capacity:
Nearly 100 new clean energy manufacturing facilities or factory expansions were announced in the U.S. between last August when President Biden signed the law and the end of May, totaling more than $70 billion in new investment, according to Canary Media analysis. And more are being announced every week.
Now coal is on its way out, so are wood burners, and governments in Europe are poking in people’s cellars, telling them to change their living habits in the next few months. That’s how Germans are beginning to see it and it’s no good telling them that they voted for it. As the net zero deadlines gallop closer, as states get tougher in their restrictions, so political tensions are starting to crackle across Europe.
Britain should watch out. It’s coming our way unless we work out new ways of mustering public support for the big climate decisions.
DB2
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The European western cultures are more practical than American culture.
I get in Ireland some will complain. But guess what if you are an ejit in Ireland you get no respect for your stupidity. A topic can make some people a national joke. You get heat for obstructing in dumb ways.
The US gives more than a pass to ejits. For 40 years we agreed with stripping our economy down.
The first part may well be true. Yes somehow, curiously, over those 40 years, the US has had better real economic growth than Europe had.
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That is hardly true. The Europeans have a lower mortality rate. The Europeans have a better income distribution. The Europeans have better environmental conditions. The Europeans have a higher education level.
I do not see what you are talking about. How have the Americans done better?
How much debt does the EU have?
In 2022, the national debt of the European Union amounted to approximately 85.34 percent of the gross domestic product.Apr 28, 2023
Is EU GDP more than US?
Since then the EU has become an economic and political force to reckon with. Its combined gross domestic product (GDP) stood at $16.6 trillion in 2022, after the U.S. ($26 trillion) and China ($19 trillion.)Jan 27, 2023
Government Debt to GDP in the United States averaged 65.20 percent of GDP from 1940 until 2022, reaching an all time high of 129.00 percent of GDP in 2022 and a record low of 31.80 percent of GDP in 1981.
We would not and in relative terms do not have the results Europe has unless we pump up or debt by a much higher percentage of our GDP than Europe does. You are building a sand castle.
What metric are you trying to use? Real GDP? That does not take into account how much debt we have to make it possible.
Which countries in the European Union have debts?
In the EU, the government debt-to-GDP ratio decreased from 88.0 % at the end of 2021 to 84.0 % at the end of 2022. At the end of 2022, the government debt-to-GDP ratio ranged from 18.4 % in Estonia to 171.3 % in Greece.May 11, 2023
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That was a few months ago. This week more bad news that could affect some ESG investors as well as those planning on using the wind turbines.
Siemens Energy saw $6.3 billion wiped off its market capitalization on Friday after warning that the impact of quality problems at its Siemens Gamesa wind turbine business would be felt for years.
The group scrapped its 2023 profit outlook late on Thursday after a review of its wind turbine division exposed deeper-than-expected problems that could cost more than 1 billion euros…
The discovery of faulty components at Siemens Gamesa in January had already caused a charge of nearly half a billion euros. Eickholt said that while rotor blades and bearings were partly to blame for the turbine problems, it could not be ruled out that design issues also played a role.
DB2
What are the issues with Siemens Gamesa’s wind turbines?
https://www.msn.com/en-us/money/companies/factbox-what-are-the-issues-with-siemens-gamesa-s-wind-turbines/ar-AA1cXdXd
It [Siemens Gamesa] said the problems could affect as many as 15-30% of its turbine fleet…
Governments across the world are setting even more ambitious climate targets which require the rapid development of renewables, including wind power, which might be difficult to attain within the prescribed timelines. Many wind power developers have already seen delays in projects due to the availability of components and rising costs…
The company said that it would be able to provide a more accurate estimate of the costs from the problems when it publishes its third-quarter results on Aug. 7…
DB2
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Bob, you often post about the obstacles to renewable energy. If you’re an engineer trying to improve renewables, these are crucial analyses.
It’s also important to keep in mind the big picture. Despite all the challenges, wind and solar have grown year over year at a rate faster than expert predictions. A McKinsey report starts with
The rapid maturation of wind and solar power has been nothing short of astonishing
They show graphs comparing the actual adoption of solar and wind and projections going back to 2006. The pattern is striking.
This is despite thumbs on the scale, corporate welfare and fraud, shiny-land in all its glory - all real and wasteful and damaging. The renewable energy government-science-engineering-industrial complex must be doing something right. We actually can do positive things.
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A string of offshore wind projects meant to power Britain are in jeopardy after the global race to net zero sent costs soaring, casting doubt over the industry’s future as a cheap source of energy. A surge in supply chain costs has pushed up the price of wind turbines, while increases in global interest rates have raised refinancing costs substantially.
It has made several projects unviable just a year after they won government subsidy contracts – leading to fears from industry insiders that Britain’s future is in jeopardy as the “Saudi Arabia of wind”…
One source said: “People won’t invest if it doesn’t give you a decent return on equity. And presently, it’s hard to see how it can.”…
DB2
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The under-projections may be due do underestimating the growth in global energy usage. For example, while renewables did grow between 2009 and 2019 the percentage of fossil fuels in the global energy mix only dropped from 80.3% to 80.2%.
DB2
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Vattenfall halts 1.4GW North Sea wind project amid rising costs
Vattenfall also said it would “investigate the best way forward” for the rest of its Norfolk zone, including the 4.2GW Norfolk Vanguard project. Both Boreas and Vanguard were set to be two of three wind farms in the area, with Boreas being constructed first…
The UK Government has set a target to install 50GW of offshore wind by 2030, an increase from the current level of 14GW.
“Conditions are extremely challenging across the whole industry right now…”
https://www.power-technology.com/news/vattenfall-halts-offshore-wind-project/:~:text=Swedish%20power%20company%20Vattenfall%20has%20halted%20a%201.4GW,of%20Norfolk%20in%20the%20east%20of%20the%20UK.
DB2
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From this spring:
Ørsted calls on UK govt for support as rising costs put Hornsea 3 at risk
Ørsted calls on UK govt for support as rising costs put Hornsea 3 at risk.
Danish offshore wind developer Ørsted is urging the UK government to provide support to renewable energy development as looming costs are putting its 2,852-MW Hornsea 3 offshore wind farm project in jeopardy.
Hornsea 3, touted as the single largest offshore wind project in the world, is planned to be located in the UK North Sea, about 120 km (74.5 mi) off the Norfolk coast.
And this month:
The decision comes despite the findings of the Examining Authority which advised the government to “withhold consent.".…
Despite the planning approval, the future of Hornsea Four is far from certain, with Ørsted already indicating it is reviewing the impact of the current tax scheme on Hornsea Three and its wider operations…
According to reports by the Times earlier this year, sharp rises in construction and financing mean the scheme is no longer viable on the terms agreed with the government last summer.
DB2
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Just to provide some balance, here is a successful offshore wind project approaching completion.
The 759 MW Hollandse Kust Noord offshore wind project is a joint venture by Shell and Eneco to provide non-subsidized offshore wind energy to the Netherlands. It began in 2020 and was scheduled to be operational in 2023.
The first electricity was produced and delivered to the Dutch mainland this month. This wind farm will ramp up to 3.3 terawatt-hours a year. Part of the electricity is being used to produce green hydrogen.
The supply chain issues of the past couple of years was certainly a big negative to the wind industry. However, things are looking up, particularly since Biden’s IRA policy provides for the first time a stable long-term plan for wind development. Not bad for an old guy.
" Siemens Energy (ENR1n.DE) is considering setting up production in the United States to help modernise the country’s power grid, keen for a slice of what is expected to be a multitrillion-dollar market following the Inflation Reduction Act (IRA).
The deliberations are part of a broader rethink at the German power conglomerate to expand its foothold in the United States, where it makes 15% of sales, as favourable regulation is providing a boost to renewables and hydrogen capacity that requires state-of-the-art energy networks."
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This problem seems to be largely self-inflicted as the conservative UK government raised the energy windfall tax such that wind energy gets taxed more than fossil fuels.
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As expected, estimates have risen…
Things have become choppy onshore, too. Wind installations on land halved in the first quarter of the year compared with the same period last year, the slowest quarter in four years, according to the American Clean Power Association.
Manufacturers have been struggling with profitability as they deliver ever-larger and more advanced machines, which are more efficient at making electricity. Now some say they are running into problems with wear and tear.
“We have problems both offshore and onshore,” said Tim Proll-Gerwe, spokesman with Siemens Energy. The company, which had previously said quality issues related to its subsidiary’s flagship onshore turbines could cost up to $1.1 billion to fix, on Monday raised that estimate to about $1.75 billion.
DB2
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Avangrid to pay $49m to cancel deal for 1.2GW Massachusetts offshore wind project
https://www.rechargenews.com/wind/avangrid-to-pay-49m-to-cancel-deal-for-1-2gw-massachusetts-offshore-wind-project/2-1-1488358
Iberdrola-controlled Avangrid has agreed to pay $48.9m in fines to the US state of Massachusetts to terminate its contracted 1.2GW Commonwealth Wind project…
DB2
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Canary Media’s chart of the week translates crucial data about the clean energy transition into a visual format.
The global renewable energy market is growing faster than most analysts had forecast — and it’s being led by solar power and a resurgent onshore wind market, much of it in China.
After modest sector growth over the last two years due to pandemic-related supply-chain woes, 2023 is setting the pace for an accelerated phase of renewable energy deployment, based on the stats in the latest Renewable Energy Market Update from the International Energy Agency.
Global renewable capacity additions are set to jump by an eye-popping 107 gigawatts to more than 440 gigawatts in 2023. It’s the largest absolute increase ever, and it’s being facilitated by improved policy support, worries about energy security, and the competitive pricing of solar, wind and energy storage.
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US offshore wind pushes ahead despite industry turmoil
As the U.S. prepares to open the Gulf of Mexico up to offshore wind, the industry faces a tricky combination of surging demand and financial woes.
The United States is about to expand its offshore wind ambitions into brand new territory. Next week, the Biden administration is set to hold the first-ever auction for offshore wind leases in the Gulf of Mexico, opening up large swaths of water between New Orleans and Houston to potentially gigawatts’ worth of renewable energy development.
The August 29 auction comes at a deeply ambivalent moment for offshore wind. On the one hand, there’s unprecedented interest in the emerging U.S. industry, which has high potential but so far generates enough electricity to power just 20,000 American homes. On the other hand, developers are facing dire financial conditions that are threatening the viability of several major offshore wind projects.
Offshore wind is expected to be a major piece of the U.S. clean energy mix, particularly in densely populated regions and coastal areas with outsize electricity demand. The technology could potentially meet up to 25 percent of the country’s power needs by 2050 — without substantially impacting wholesale electricity costs, according to a recent study by the University of California, Berkeley. But first, the U.S. has to figure out how to overcome industry challenges and get the turbines it plans to build up and running.
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