The Daily Energy
Climate change is the main topic of discussion at Davos (above), as you might expect, and the solution is renewable investment, as you might expect. The experts recommended $700 billion in renewable investment and warned world economies would suffer $1.2 trillion in damage if the money isn’t invested. Whether all this is going to be worthwhile is still subject to debate. Indur Goklany, on MasterResource, says fossil fuels have been humanity’s liberator while David Roberts, on Grist, says that solar may eventually be cheaper than coal. But then it won’t need subsidies, right?
The Brits are doing their part by launching the “Green Deal,” an effort to improve energy efficiency in 1 million homes. Senator Barbara Boxer, chair of the Environment and Public Works Committee, wants to do the same thing in the U.S. and is targeting efficiency. China is on board, too, and the Natural Resources Defense Council claims efficiency improvements have helped California avoid building new power plants. But then the outmigration of the state’s industries probably helps as well. In any case, a study at the University of California at Davis says the famous “rebound effect” – where people use improvements in efficiency to consume more – has been overplayed. That Rebound Effect, by the way, dates all the way back to Jevon’s Paradox, which described how improved efficiency in steam engines had led to the explosion of consumption in 19th century coal.
Germany’s energy transition away from nuclear continues to produce bad news. Business Week reports that the “Mittelstand” – the nation’s 3 million small and medium-sized businesses – are being particularly hard-hit by renewable energy surcharges. The article cites a family-owned resin business that is moving its operation to Turkey to avoid high energy costs. The government has decided to cap the renewable surcharges for this year but that just pushes the costs back on the utilities. Canada Free Press reports that unpredictable wind and solar generators are starting to destabilize the German grid – especially since the Czech Republic and other Eastern European countries have rebelled against absorbing surplus wind. EU Energy Commissioner Guenther Oettinger is chiding Germany for its “energy isolation.” But hey, it’s better than living next to a nuclear reactor, right?
Finally, Russia continues to put the screws on its former satellites and allies over natural gas supplies. The Serbs say they are being overcharged and are seeking a better deal. Gazprom wants to bill the Ukraine $7 billion for gas supplies for which it contracted but didn’t buy. And the Russians have struck a pipeline deal with Croatia and are eyeing the Greek market. (Good luck in getting your bills paid there!) But a plan to open an Arctic pipeline to supply Asia with Russian natural gas is still ten years away, so the price squeeze will still be on the West. Isn't ti time for Europe to get fracking?