Switzerland and Sweden Used as Models for Irish Carbon Tax

A Benchmark for the Carbon Tax, no Benchmark for cheap electricity  

As part of a comprehensive policy package, carbon taxes will have a central role in guiding the energy transition by providing the economic incentive to switch from high-carbon to low- or zero-carbon technologies and products. In Ireland, the Climate Change Advisory Council has recommended a phased increase in the carbon tax from the current €20 per tonne to €80 per tonne by 2030. In terms of benchmarking, it is worth noting that some countries already have carbon taxes at the upper end or even in excess of this range, with the Swedish carbon tax currently at $139 (e112) and Switzerland at $101 (e81).

The Central Bank have now thrown their weight behind the sudden political push for an increase of the carbon tax in Ireland. Their recent report about climate change and it's alleged impacts on the economy fail to address the issue of the unsustainable levels of government and private debt in Ireland, which allow us to live far beyond our means and consume resources at a far greater rate than previous generations. There is no mention of unsustainable government spending and the bloated welfare state (The cost for a new hospital in Dublin has risen from €400m to nearly €2bn, welfare spending still stands at €20bn despite lowest unemployment for over a decade).

The Central Bank fails to understand that emissions are coupled with economic growth so that if climate change were really having an impact on the economy, we would be seeing economic decline right now, followed by a consequent reduction in emissions. They make the observation that 1991-2016 temperatures were higher than the period for 1960-1990, which actually supports the natural cyclical theory of climate change rather than the man made theory.  They also claim that insurance payouts due to extreme weather events are up. The 1940s were perhaps the worst decade for flooding and crop devastation in recent history but I can find no evidence that there were any insurance payouts at all. But I want to focus on one particular part of their report, the carbon tax. 

The purpose of the Central Bank presentation on climate change appears to be to groom Irish people for more taxes, specifically carbon taxes. 

They present Sweden and Switzerland as models for Ireland to follow in this regard.  What they fail to state is that Sweden has electricity prices at least 25% less than Ireland. But more importantly, Switzerland, which has a carbon tax equal to that proposed by Irish politicians, has had one of the lowest electricity prices in the world for many years, roughly half that of Ireland, which now ranks as one of the most expensive countries for electricity in the world.  Switzerland generates most of it's electricity from hydro and nuclear (as does Sweden). How is it that Ireland's indigenous wind industry cannot compete with Swiss hydro, an indigenous renewable source that does not lead to high Swiss electricity bills ?

The examples of Sweden and Switzerland actually undermine the central banks case for more carbon taxes in Ireland as it shows that we are already paying comparatively much higher for energy. A carbon tax similar to what was introduced into these countries could make Ireland the most uncompetitive country in the world for energy with actual knock on impacts for our economy far worse than "climate change". 

One could have perhaps made a better case for the carbon tax if wind energy had led to the cheap energy revolution that Irish people were promised.  But as we all know that never materialized.

https://ec.europa.eu/eurostat/web/products-eurostat-news/-/DDN-20180807-1

Is Ireland Becoming Wetter ?

In 2013, the Irish media reported that "ongoing climate change will make Ireland wetter over the coming decades". This claim has persisted ever since climate hysteria took root here.  I took a sample of seven weather stations from different areas of the country to test the claim. In every single one, 2016 and 2017 had less rainfall than 2015. Only two showed more rainfall in 2017 Vs 2016. The other five showed declining rainfall levels over the past two years. 

To further investigate this trend of lower rainfall levels, I checked a completely different source - hydro power. Years with high rainfall should coincide with years that had high hydro power output and vice versa.  I obtained hydro power data from SEAI from 2008 to 2016. 2008 and 2009 were high points for hydro that have not been matched since. Since then, hydro power has varied but there is a clear overall decline.

The fall in rainfall during 2016 vs 2015 can also be seen corroborating the above weather stations.

The Myth of Denmark as a self sufficient renewables success

“When you see the wind blowing in your neighbourhood and the turbines moving, you know that you are making money, which is great incentive to support wind power,” Mortensen observes, adding that polls show around 90 per cent of Danes are in favour of increasing wind energy production.

The outcomes to date are impressive. Denmark is now generating close to 40 per cent of its annual electricity needs from wind and on some days production reaches as high as 120 per cent of needs. An efficient market exchange operates with its neighbours in Germany, Norway and Sweden to take advantage of fluctuating supply and demand, as dictated by weather conditions. - Irish Times, October 2015

Much has been made of Denmark in the Irish media of late and indeed by politicians who are holding it up as an example for Ireland to follow in terms of wind energy.

Unfortunately, much spin comes out of Denmark, which coincidentally sells alot of wind turbines.

Danish Wind Subsidy Scheme Vs Irish Wind Subsidy Scheme -

why the Irish wind industry should be careful for what they wish for

The subsidy scheme for wind is slightly different there :

A price supplement is provided of DKK 0.25/kWh for the sum of electricity generation for6,600 full load hours and for electricity generation of 5.6 MWh per m2 rotor area. The pricesupplement is reduced for each DKK 0.01 the market price of electricity exceeds DKK0.33/kWh nominally, and, thus, the supplement altogether lapses, if the electricity pricereaches a cap of DKK 0.58/kWh or more in current prices 

This works out at a subsidy of €30/ Mwh on top of the market price, but once the market price goes above € 40/MWh there is a reduction in subsidy, with no subsidy at all once the market price hits
€ 80/MWh. Aswell, this subsidy only applies to 6,600 hours of operation i.e. 75% of the year. After this, the wind farm receives the prevailing market price in the region like everyone else. As a result, it is not uncommon for wind farms to shut down once the subsidy runs out as they don't receive enough from the market to cover their costs :

 Now owners of wind turbines complain that spot prices do not even cover maintenance cost - PF Bach, Denmark 2015

Somehow I can't see Ireland adopting the Danish subsidy scheme, yet, Ireland is keen to copy everything else from Denmark in terms of wind integration.

Let's take a look, step by step, at the reality of Denmark's grid operation in 2015:

1. Denmark has 3.5GW of onshore wind, around 1GW more than Ireland. On top of this they have 1.2GW of offshore giving a total of 4.7GW, compared to Ireland's 2.5GW. 
2. Nearly 40% of the electricity mix was from wind in 2014. Strong interconnections was the main factor behind this achievement. However, this figure includes the quite high amounts of wind that is exported so the amount of wind energy actually consumed in Denmark would be less than this figure in reality.
3. Denmark has eight interconnectors compared to Ireland's two.
4. There are many more interconnectors planned in Denmark. It is envisaged that these will make up for the shortfall in dispatchable capacity. Ireland has a surplus of dispatchable capacity. 
5. Denmark is heavily reliant on CHP for dispatchable plant which is declining meaning that Denmark will no longer be self-sufficient in a few years. By 2018, it will be heavily reliant on expensive imports through interconnectors. The reality is that Denmark is far from the "self sufficient renewable success" portrayed by the media here in Ireland. If Denmark had not access to the unique Nordic system, they would have to build more power stations, like the Germans, English and Dutch. 
6. Export to import exchanges can change from 60% export to 75% import in the space of half a day (such as 9th July 2015)
7. It is widely assumed that export prices are practically Zero while import prices are very high. Hence, why exporting wind power does not pay (unless you find a sucker willing to pay the subsidy). 
8. 99% of (their neighbour) Norway's power comes from Hydro. This can be ramped up and down at the touch of a button, without losses in efficiency and therefore is perfect for back up for wind energy. But it is very expensive and as per point 7, the Norwegians regularly fleece the Danes for using it.  Ireland has very little hydro and neither does the UK or France. Gas turbines, by contrast, are not designed to run on low operation levels during high periods of wind, Nuclear plant are designed to run at baseload i.e. constant output. So the Danes are in a unique position viz a viz their wind generation and access to substantial amounts of hydro power. Ireland is not comparable in any way whatsoever.
9. Denmark has the highest electricity prices in the EU. Not surprising, considering the above.

Hydro dam in Norway

Sources : 

PF Bach http://pfbach.dk/firma_pfb/pfb_wind_power_integration_in_denmark_2015.pdf

Danish Dept of Energy: Outline of the Danish support schemes for electricity generation based
on renewables     http://www.ens.dk/sites/ens.dk/files/undergrund-forsyning/el-naturgas-varmeforsyning/el/elproduktion/stoette-vedvarende-energi/outline_of_dk_support_schemes_update_22_04_13_081113.pdf)

Analysis by Dr Fred Udo challenges accuracy of SEAI report

The reduction of CO2 emissions by Irish wind energy

Last year, SEAI issued a (revised) report on savings in the Irish system due to wind for 2012. I pointed out in a previous post that some of the assumptions they used resulted in greater CO2 savings than would have been the case in reality.

Dr Fred Udo has done an excellent analysis on this report, using more valid assumptions than the ones used in the SEAI report. He concludes that :

1. SEAI admits there is increased fuel use due to the insertion of wind power in the grid.
2. The authors try to minimize the efficiency losses by inflating the use of OCGT in the reference case.
3. The CO2 calculation used in the PLEXOS model (used by both SEAI and Eirgrid) produces too low CO2 intensities, hence even the 30% loss found in the corrected calculation is too low.
4. Corrected for self-energy (the energy required to build a new generation system around wind) we find a loss of 40% (from SEAI's calculated savings) for 15,3% wind penetration.

Dr Udo makes the distinction between a system with lots of hydro, like Denmark, and one without. Hydro is an efficient back up for wind as it can be turned on and off instantly, while gas generation loses its efficiency with increased amounts of intermittent wind. Yet, the Irish government continue to draw comparisons between Ireland and Denmark.

The full report can be read here :

http://www.clepair.net/Udo20150831-e.html

Hydropower - how environmentally friendly is it ?

A Dam in the USA blocks the upstream and downstream movement of fish. Here, sturgeon congregate at the base of a dam that is preventing them from swimming upstream to spawn (Photo by USFWS)

Many green campaigners would have us believe that hydro power is easy on the environment but just how environmentally friendly is it ?

Amy Kober has written a thought provoking article on it :

If hydropower is not done right, it can be destructive for rivers and the fish and wildlife that depend on them. It damages natural habitat and prevents fish from reaching spawning grounds. It can dry up entire stretches of river. It’s the only renewable energy source that drives species toward extinction.

One could argue that wind turbines and solar panels could drive certain bird species towards extinction. There are environmental drawbacks with most renewable technologies just like there are with most conventional generation technologies i.e. there are no easy lunches. 

In Ireland, our main hydro plant is Ardnacrusha operated by ESB. According to Dr William O'Connor, just 500 salmon passed through the fish pass there in 2013. I fully agree with him when he states that :

It is a national disgrace that salmon escapement through the Shannon dams has fallen so low, when measured by successes on other European Rivers with many more problems than the River Shannon has (i.e. Rhine, Thames, and Seine). There should and can be salmon in the upper Shannon.

Personally, I would not mind paying the PSO Levy if it went to compensate ESB for curtailing generation during times of peak upstream Salmon migration. Sadly, the PSO is going to less efficient and reliable sources, while salmon numbers in the Shannon continue to dwindle.