The cost of electricity across the EU

murphaph

I can see a (coal fired) power station from my balcony here in Berlin. It pumps out smoke and filth into the atmosphere 24/7. I am in favour of renewables wherever practicable and believe they have a bigger role to play. I however also believe that nuclear, while not clean, is a damn sight cleaner than coal and fossils in general.

The German decision to scrap nuclear was a knee jerk (over) reaction to Fukushima and nothing else. I would have expected better from Merkel but there you go.

Austria had a similar story to Ireland except it was even more stupid. They actually built a complete nuclear plant (and paid Siemens a lot of money for it) and then had a change of government and a very narrow anti-nuclear referendum was held and before it came on stream it was decommissioned and they paid Siemens again to take all their stuff back out! Crazy stuff... Zwentendorf Nuclear Power Plant

Biofuels to me should not play any role in energy generation as they rob land from more important tasks like food production and with a growing population, food and water will become scarcer.

Macha

murphaph wrote: »

I can see a (coal fired) power station from my balcony here in Berlin. It pumps out smoke and filth into the atmosphere 24/7. I am in favour of renewables wherever practicable and believe they have a bigger role to play. I however also believe that nuclear, while not clean, is a damn sight cleaner than coal and fossils in general.

The German decision to scrap nuclear was a knee jerk (over) reaction to Fukushima and nothing else. I would have expected better from Merkel but there you go.

Not at all. The original decision to phase out nuclear power in Germany by2022 was made during the chancellorship of Schröder in 2000. Merkel agreed to comply with this original decision by the events in Fukushima, and even speed up the phase out.

murphaph wrote: »

Biofuels to me should not play any role in energy generation as they rob land from more important tasks like food production and with a growing population, food and water will become scarcer.

Land based biofuels, of course. Advanced biofuels could deliver some renewables.

SeanW

Macha wrote: »

You'll need to provide some a credible study to prove that demand couldn't be met with the system I described. So far, all you've done is claim it.

I'm not sure I need to, really. For the last 40 years or more, the environmental left (Greenpeace and world Green parties) has been telling us that we don't need nuclear, in spite of all the evidence to the contrary.

All driven by an agenda. Most of it of deeply questionable veracity. Why should I believe that anything has changed?

All energy technologies have an element of instability in them

True, but renewables are literally as dependable as the weather. Yet they're subsidised like crazy.

and you haven't offered any evidence that renewables cannot be fully integrated into an electricity grid.

It isn't for me: my central claim has always been that a choice must be made between nuclear power and fossil fuels, with the exception of some Northern European countries like Iceland (blessed as they are with heaps of hydroelectricity and thermal). Including Germany where it is surely beyond dispute that the environmental left is calling the shots.

As for subsidies, the nuclear industry is a mature industry yet is incapable of existing without state aid. In Germany alone between 1950 and 2008, nuclear received subsidies of more than (2008)€167 billion. That doesn't include future decommissioning costs, future waste disposal costs or insurance risk borne by the state.

Ah yes, it's because of nuclear power that electricity costs €0.35 per k/wh :rolleyes:

I'd like to know of any high-level backing of these projects since the announcement of the nuclear phase out. The reality on the ground is very different.

That's funny: the Merkel-Schroeder administration was explicitly clear in its support for coal fired power as far back as 2007.
http://www.spiegel.de/international/germany/caught-in-the-climate-conundrum-germany-plans-boom-in-coal-fired-power-plants-despite-high-emissions-a-472786.html

In particular pay attention to a speech, recent to that time, by the chancellor:

Angela Merkel wrote:

Germany has considerable natural resources in the form of brown coal which we shouldn't downplay

The government of Germany, starting with the SPD and SPD/CSU coalition and picked up by the CSU after Fukushima, have been absolutely crystal clear: The nuclear plants must go, and if coal is all there is to replace them with, so be it.

And all of this has been done with the environmental left clearly pulling the strings: sky high solar power subsidies, lots of windmills everywhere, and a nuclear phaseout are all core demands of the mainstream environmental movement and all are being implemented without resistance.

I find it really incredible that despite your side (the environmental left) clearly running Germany's energy policy, that you should try to disown the coal plant building programme despite it clearly being a consquence of your policies.

In summary, since announcing the nuclear phaseout, Germany has announced no new coal plant projects and has actually stepped away from 6 coal plant projects.

That doesn't seem to gel with what I've posted: You say that the nuclear phase out was announced in 2000 (and only accelerated in 2011 due to Fukushima), but I've posted clear evidence that the coal boom was planned at least as close back as 2007.

Curious.

I might also add that Merkel has voiced her support for the backloading proposal of the EU Emissions Trading System, which would bring up the carbon price. The main function of a strong ETS price is a switch from coal to gas. So I'm not sure how you can claim the current German government is strongly supporting coal.

Yes, because clearly electricity isn't expensive enough already. :rolleyes:

Heroditas

SeanW wrote: »

True, but renewables are literally as dependable as the weather. Yet they're subsidised like crazy.

PSO DECISION PAPER 2012-2013

In Ireland, the PSO levy for 2012-2013 is €131m.
€47.5m of that is for REFIT to support renewables.
The remainder of it goes to Aughinish, Tynagh and the peat burning stations.
Now, who would you say is getting "subsidised like crazy"? Renewables or the fossil-fueled plants.
Throw in approximately €500m in capacity payments to generators as well, the bulk of which goes to fossil-fueled plants and we see that your statement about subsidies doesn't quite ring true.

OssianSmyth

nesf wrote: »

This raises interesting questions about why it is so expensive for us to produce one kW of electricity.

Marginal cost of production of one kW of electricity in Ireland is average for the EU. Standing charges, however, are double the UK price. Our distribution system is necessarily longer due to our dispersed housing pattern.

nesf wrote: »

Yes, definitely economies of scale come in here to some extent, but is it our fuel mix combined with a high wage base that really kills us here?

that and our distribution costs

nesf wrote: »

are we really paying *that* much more in wages than the other countries in Europe or is not going the nuclear route *that* bad cost wise per unit?

Introduction of new nuclear now would increase prices (see the UK, Finland etc). Ireland already uses imported nuclear electricity without the safety or cost implications.

nesf wrote: »

Expensive electricity is both bad for business and bad for consumers, so really keeping the cost of electricity down should be a much bigger issue for Ireland than it is at present.

Are you sure that electricity costs should be a bigger issue for enterprise policy in Ireland?

SEAI's analysis in 2007 looked at the industrial sector and found that 94% of industrial companies spent less than 4% of their direct costs on electricity. At high consumption levels, Eurostat shows that Irish industry pays less for electricity than the EU average.

Outside of industry, electricity costs are an even less significant cost of doing business when compared to wages or property. If you run a medical devices, software or insurance company, then how worried are you about your electricity bill compared to your employee income taxes or public transport or broadband?

Ireland's climate puts us at an advantage to other countries for energy costs as heating and cooling costs are lower throughout the year in offices. Datacentres are cheaper to run here too.

nesf

OssianSmyth wrote: »

Are you sure that electricity costs should be a bigger issue for enterprise policy in Ireland?

SEAI's analysis in 2007 looked at the industrial sector and found that 94% of industrial companies spent less than 4% of their direct costs on electricity. At high consumption levels, Eurostat shows that Irish industry pays less for electricity than the EU average.

Outside of industry, electricity costs are an even less significant cost of doing business when compared to wages or property. If you run a medical devices, software or insurance company, then how worried are you about your electricity bill compared to your employee income taxes or public transport or broadband?

Ireland's climate puts us at an advantage to other countries for energy costs as heating and cooling costs are lower throughout the year in offices. Datacentres are cheaper to run here too.

High electricity's cost to business isn't just the direct cost to the business. High electricity costs usually are reflected in wage level to some extent and increase the cost of your domestic inputs. It'll vary hugely from sector to sector how big an issue this is.

OssianSmyth

nesf wrote: »

High electricity's cost to business isn't just the direct cost to the business. High electricity costs usually are reflected in wage level to some extent and increase the cost of your domestic inputs.

High employee electricity bills lead to higher wage demands. How significant do you think this factor is compared to income taxes, property prices, transport and food costs? Think of your own costs under those four headings.

It'll vary hugely from sector to sector how big an issue this is.

Yes and the SEI report found just 70 companies in Ireland with electricity costs above 10% of direct costs. Companies in sectors with high consumption are not at a competitive disadvantage as Eurostat finds Ireland below average price for electricity costs for this group.

There are more factors than unit price in determining the value of Ireland's electricity supply to commercial customers.

• Long term security of supply.
• Efficiency of building stock.
• Climate.

Security of supply is improving as we diversify into domestically produced renewables, reduce our fossil fuel use, and build interconnectors to other countries.
New building regulations are helping with efficiency but there is a historic problem following a long term policy of making costs low for builders during the boom.
Climate is changing and adding risk.

nesf

OssianSmyth wrote: »

High employee electricity bills lead to higher wage demands. How significant do you think this factor is compared to income taxes, property prices, transport and food costs? Think of your own costs under those four headings.

Yes and the SEI report found just 70 companies in Ireland with electricity costs above 10% of direct costs. Companies in sectors with high consumption are not at a competitive disadvantage as Eurostat finds Ireland below average price for electricity costs for this group.

And that was for direct costs. Maybe I'm unclear. I'm not worried about the actual electricity bill for a business. What concerns me is that electricity prices feed into the costs of an enormous amount of goods and services across the economy and a reduction in electricity prices, assuming it's passed on due to competition etc, would not just reduce the electricity bill for the company but have an effect across its range of inputs in terms of cost. I'm really failing to see why trying to have lower energy costs could possibly be a bad thing for our economy. As I said in my original post, I ask why it shouldn't be a bigger issue (we rarely discuss it politically, ever), not why it shouldn't be the biggest issue.

Macha

nesf wrote: »

And that was for direct costs. Maybe I'm unclear. I'm not worried about the actual electricity bill for a business. What concerns me is that electricity prices feed into the costs of an enormous amount of goods and services across the economy and a reduction in electricity prices, assuming it's passed on due to competition etc, would not just reduce the electricity bill for the company but have an effect across its range of inputs in terms of cost. I'm really failing to see why trying to have lower energy costs could possibly be a bad thing for our economy. As I said in my original post, I ask why it shouldn't be a bigger issue (we rarely discuss it politically, ever), not why it shouldn't be the biggest issue.

True, it is one of the more significant inputs into the economy, which makes the PPP comparison a bit tricky.

In reality, I don't think lower energy costs are an option in Europe in the near future. We'll have to compete with other regions but we're not going to win on energy prices.

OssianSmyth

nesf wrote: »

electricity prices feed into the costs of an enormous amount of goods and services across the economy

Yes, but is that not also the case for income taxes, property costs, transport and food costs - but on a far larger scale? We rarely hear calls for reductions in these more significant costs.

I'm really failing to see why trying to have lower energy costs could possibly be a bad thing for our economy.

Nobody suggested that. Everyone would welcome a reduction in electricity prices.

nesf

OssianSmyth wrote: »

Yes, but is that not also the case for income taxes, property costs, transport and food costs - but on a far larger scale? We rarely hear calls for reductions in these more significant costs.

Eh, people are calling for lower rents, petrol/diesel prices, general food and good prices and such all the time. Haulers are regularly in the news about fuel costs for instance. I'm actually unaware of any country where people don't complain to some extent about income tax!

I'm actually unsure of your point here. I'm not saying electricity prices are the major burden on individuals and industry and I'm not saying other factors affect the economy as much or more. I merely say that high electricity costs are not a good thing and we should be concerned about this along with things like high fuel costs etc.

KyussBishop

Macha wrote: »

True, it is one of the more significant inputs into the economy, which makes the PPP comparison a bit tricky.

In reality, I don't think lower energy costs are an option in Europe in the near future. We'll have to compete with other regions but we're not going to win on energy prices.

Actually, Europe (and most countries suffering economic slowdowns) are in an unusually good position for lowering energy costs: We (Europe) have an enormous reserve of unemployed workers, who can be put to work on manufacturing and construction for new energy sources, like nuclear power plants and renewables, among pretty much anything else you can think of doing with that labour.

You can directly fight inflation in the long run (that will be caused by increasing energy and particulary fossil fuel costs), by utilizing either debt-funded or monetary-policy funded (limited by inflation targets) spending in the EU, to employ all of that idle labour and put them to work.

For all the scaremongering you hear about the use of money creation for spending (which ignores that you can limit it by inflation targets), this is an actual way you can reduce and prevent inflation, which highlights one of the most essentially important roles public use of money creation can provide.

The real deficit in our economies, is not excess government spending (which isn't pushing up anywhere near inflation limits today), it is the waste of labour potential, by having enormous amounts of unemployed people, and a huge output gap; every day it continues, that is a permanent waste of potential human effort, and potential economic activity, that we will never get back.


Arguably, it is only going to be public spending that will provide the amount of effort needed to construct these required power sources, because much of it will simply not be profitable enough for private industry, and private industry (concerned only with short-term profits, not long-term goals like energy price stability) can profit much more by letting the energy problem get worse, so that prices can keep on being jacked up.

Indeed, much of the excessive cost of oil today, is down to speculation on the financial markets, expressly for the purpose of gouging extra profits at the expense of everyone else in society.

nesf

KyussBishop wrote: »

Actually, Europe (and most countries suffering economic slowdowns) are in an unusually good position for lowering energy costs: We (Europe) have an enormous reserve of unemployed workers, who can be put to work on manufacturing and construction for new energy sources, like nuclear power plants and renewables, among pretty much anything else you can think of doing with that labour.

Eh, no, we need to develop much better technology with regard to either nuclear or renewables. This isn't the kind of work the average man off the street can do.

hfallada

Heroditas wrote: »

That statement is no longer true because the market is now fully deregulated.
Coal is currently very cheap and due to the collapse in the ETS market, it is much cheaper to generate electricity here using coal than with gas, also due to the sharp increases recently in gas prices.
However, coal plants are not as flexible as gas plants, hence why gas plants make up the majority of the generatin mix here.

But if ESB gets 60% of the market share again. The market becomes regulated again as a monopoly(what the EU considers a monopoly) has formed

Heroditas

hfallada wrote: »

But if ESB gets 60% of the market share again. The market becomes regulated again as a monopoly(what the EU considers a monopoly) has formed

Are you talking about generation or retail market share though?
They've sold off a load of their plants so they can't gain a monopolising share in the market again.

KyussBishop

nesf wrote: »

Eh, no, we need to develop much better technology with regard to either nuclear or renewables. This isn't the kind of work the average man off the street can do.

We have to do both; we have to construct with existing technology because of the coming fossil fuel cost shocks (it will be getting more expensive, and it is already too late to avoid that entirely), and we have to develop new technology as well.

This isn't a choice either, because we must act in order to alleviate the future fossil fuel cost increases, otherwise we will be experiencing general price/cost inflation as a result of it; we can ignore it, but at the cost of future inflation and energy supply/cost instability.

You can get a lot of people employed, working on construction of nuclear power plants for starters, and you can train people as part of any public program as well. The resources and labour potential are all there across Europe, ready to be put to use (even if it requires training for many - might as well get that started now).

Macha

KyussBishop wrote: »

We have to do both; we have to construct with existing technology because of the coming fossil fuel cost shocks (it will be getting more expensive, and it is already too late to avoid that entirely), and we have to develop new technology as well.

This isn't a choice either, because we must act in order to alleviate the future fossil fuel cost increases, otherwise we will be experiencing general price/cost inflation as a result of it; we can ignore it, but at the cost of future inflation and energy supply/cost instability.

You can get a lot of people employed, working on construction of nuclear power plants for starters, and you can train people as part of any public program as well. The resources and labour potential are all there across Europe, ready to be put to use (even if it requires training for many - might as well get that started now).

I agree - there is investment needed in the roll out of existing technologies - transmission grids, interconnectors, wind farms, PV etc. But there is also a need to invest in R&D for new technologies.

Something to note: nuclear is not very job intensive - possible the least job intensive of the main energy technologes.

nesf

KyussBishop wrote: »

We have to do both; we have to construct with existing technology because of the coming fossil fuel cost shocks (it will be getting more expensive, and it is already too late to avoid that entirely), and we have to develop new technology as well.

This isn't a choice either, because we must act in order to alleviate the future fossil fuel cost increases, otherwise we will be experiencing general price/cost inflation as a result of it; we can ignore it, but at the cost of future inflation and energy supply/cost instability.

You can get a lot of people employed, working on construction of nuclear power plants for starters, and you can train people as part of any public program as well. The resources and labour potential are all there across Europe, ready to be put to use (even if it requires training for many - might as well get that started now).

1) Building a nuclear powerplant isn't going to happen in the next decade with the political issues regarding it so let's ignore that.

2) Building windfarms etc, there's a relatively small amount of general labour available with such but a lot of the work involved is quite specialist and isn't the kind of thing you can pull people off the dole queue for unfortunately. Especially if we're talking about offshore wind which I think (but I'm no expert) is something we should definitely be building more of.

3) Power generation, outside of dam building, isn't a huge labour sink you can use for stimulus spending. Road building, overpasses and similar are better ideas in this respect normally because they are more labour intensive and require less specialist work than power generation building does.

TL;DR: Stimulus spending I don't have a problem with but I don't think power generation is a panacea here.

Macha

Energy infrastructure isn't just generation, it's also transmission lines, substations, upgrading the distribution system, installing smart meters, electric vehicle infrastructure, etc etc.

nesf

Macha wrote: »

Energy infrastructure isn't just generation, it's also transmission lines, substations, upgrading the distribution system, installing smart meters, electric vehicle infrastructure, etc etc.

Most of those are fairly specialist jobs. Unless you want to leave randomers play around with switchboards, install transformers and generators etc.

There's work there definitely but it's not "shovel ready" stuff, we'd have to train people before letting them erect power lines for instance. Substation work, beyond building the physical shell, is really not something you're going to leave anyone but specialists at.

KyussBishop

True enough, a lot of that is indeed very specialist and perhaps not very labour intensive, but the way I look at it, is we need to do it as part of a multi-decades-long project, for transitioning our energy generation resources away from fossil fuels; this is on a timescale long-enough, to make it worth sinking the time into training (even if that would take a long time). I don't just talk of Ireland either, but Europe as a whole.

Certainly though, it would not (and shouldn't try to) use up all available idle labour; there is significant room for action here though, and if Europe wanted to (as a whole) it has the resources available, to make a Manhattan-project style push, towards research and facilities aimed at developing multiple new sources of power generation; many of the more prominent ones being Generation IV nuclear plants, such as breeder and thorium reactors, as well as the multiple different types of fusion reactor types, not to mention more advanced photovoltaics and efficiency improvements in power transmission.

There's no silver bullet technology for resolving this problem, but there are dozens upon dozens of technologies in development that resources and effort could be sunk into, and which private industry isn't likely to develop fast enough on its own.

When you're dealing with projects you want to be lasting over the long-term, training isn't really a roadblock to that at all; these are things most can agree, are pretty important (if not essential) technologies to be developing and constructing rapidly.

Macha

nesf wrote: »

Most of those are fairly specialist jobs. Unless you want to leave randomers play around with switchboards, install transformers and generators etc.

There's work there definitely but it's not "shovel ready" stuff, we'd have to train people before letting them erect power lines for instance. Substation work, beyond building the physical shell, is really not something you're going to leave anyone but specialists at.

Hah, true. There would definitely be some upskilling needed for large parts of the required workforce but there is a lot of basic construction work as well that is subcontracted out.

There is a difference, of course, between jobs generated in the energy industry itself and the impact of energy prices on jobs in the economy as a whole.

Thujrog

Victor wrote: »

Because there was no investment or renewal going on. We are now playing catch-up.

Name their foreign generation / supply businesses.

ESB International. Check out www.esbi.com

Victor

solas111 wrote: »

The irony is that the ESB is running successful businesses in many other countries

Victor wrote: »

Name their foreign generation / supply businesses.

Thujrog wrote: »

ESB International. Check out www.esbi.com

I think you mean http://www.esbi.ie/our-businesses/generation/generation.asp and http://www.esbi.ie/our-businesses/generation/generation-portfolio.asp

* Rousch 412MW CCGT - Punjab, Pakistan - 7.5% share
* Amorebieta, 755MW CCGT - Basque Country, Spain - 50% share
* Corby 350MW CCGT - Northamptonshire, UK - 100%?
* Marchwood 840 MW CCGT - Southampton, UK - 50% share
* 25 MW wind farm, West Durham UK - 100%?

So, "many other countries" appears to mean three.

Thujrog

Victor wrote: »

I think you mean http://www.esbi.ie/our-businesses/generation/generation.asp and http://www.esbi.ie/our-businesses/generation/generation-portfolio.asp

* Rousch 412MW CCGT - Punjab, Pakistan - 7.5% share
* Amorebieta, 755MW CCGT - Basque Country, Spain - 50% share
* Corby 350MW CCGT - Northamptonshire, UK - 100%?
* Marchwood 840 MW CCGT - Southampton, UK - 50% share
* 25 MW wind farm, West Durham UK - 100%?

So, "many other countries" appears to mean three.

These are just the plants that ESBI has a share it. It is also contracted to manage power plants in Malaysia, Pakistan and Spain (see http://www.esbi.ie/our-businesses/operations-and-maintenance/o-and-m-portfolio.asp). They offer consultancy and expertise in the setting up of power stations and infrastructure. Examples include Croatia (http://www.esbi.ie/our-businesses/case-studies/ESBI-Transmission-and-Distribution-Croatia.pdf) and Tanzania (http://www.esbi.ie/our-businesses/case-studies/ESBI-Millennium-Challenge-Account-Tanzania.pdf), Vietnam (http://www.esbi.ie/our-businesses/case-studies/ESBI-Hai-Phong-Vietnam.pdf) and Bahrain (http://www.esbi.ie/our-businesses/case-studies/ESBI-Hidd-Bahrain.pdf)

ESBI are a well-respected international company. They compete for and win large contracts to develop and manage power stations. They are an indication of strong technical and business expertise in power generation in Ireland.

Victor

But those are essentially engineering contracts, not generation and sale of electricity - it is somebody else's power station.

Thujrog

Victor wrote: »

But those are essentially engineering contracts, not generation and sale of electricity - it is somebody else's power station.

In some of the examples ESBI runs the entire plant. In other situations they have a partial role in managing the plant or have a role in the development of the plant.