EU Commission unveils ‘European Green Deal’ - Page 3 - Politics Forum.org | PoFo

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#15101075
Investment in renewables is accelerating and will overtake oil and gas in 2021

https://markets.businessinsider.com/new ... 1029318482

"The transition to renewable power from traditional fuels will create a $16 trillion investment opportunity through 2030 as spending shifts to new infrastructure, Goldman Sachs analysts said Tuesday.
The bank projects green-energy spending to pass that of oil and gas for the first time ever next year and account for roughly 25% of all energy spending. The share stood at just 15% in 2014, but a dive in fossil-fuel investing over the past decade shifted more dollars to clean energy initiatives."
#15101126
BeesKnee5 wrote:Oil prices have to be higher than the simplistic extraction price you are quoting in order for it to be viable. Mainly because the oil extracted is being used to pay debt rather than being invested in future extraction.

See page 3 of this report

https://mufgresearch.com/MUFGShowDocument.aspx?id=79321

"The fiscal budget breakevens of >USD45/b signals that neither Saudi Arabia or
Russia can afford low prices for a sustained period of time. Indeed, the
comprehension of fiscal breakevens for oil producers within OPEC+ remains central
to anticipating medium-term oil policy movements and goes someway to
understanding the frictions between Russian and Saudi oil policy agendas – Russia’s
2020 fiscal breakeven is USD30-35/b lower than Saudi’s at ~$50/b"

For example
US shale needs prices above $45-55 for fiscal breakeven. While prices stay low, profit for investors disappears and debt consumes them.
https://www.investors.com/news/us-shale ... evolution/
"Chesapeake Energy (CHK), once the No. 2 gas producer, has lost 99% of its value as it struggles under $9 billion in debt. Shale gas development has been "an unmitigated disaster" for investors, says Steve Schlotterbeck, former CEO of No. 1 natural gas producer EQT, whose stock has fallen 90% from its mid-2014 peak."

The reason we are not at 100% renewables is because it is only in the last 2 years that their price has become competitive and that storage is not yet a fully mature technology. I expect renewables to continue increasing their share of generation and once they are exceeding demand at their peak then storage will come into play, reducing fossil fuel use at other times. Oil and Gas are in a vice, lower prices and they are uneconomic, higher prices and renewables outcompete, the net conclusion can only be that they will lose market share .


The breakeven price that you are discussing is a bit different compared to what you mean. Breakeven price that you are talking about is linked to those countries budgets. Basically it is how much the price needs to be for the country to fill their budget and be happy. Extraction and distribution for SA is around 10 dollars. Rest is just taxes and SA budget etc. Price for some Russian oil is around 10-15 but mostly it is around 25 USd. Rest is once again, tax and other things. The most cheapest US oil shale is around 25 USD or more but US doesn't have a need to use that oil to fill their budget so its a bit simpler for US producers.

Basically oil production is not going to stop. The countries will simply reduce taxes and put less money in the budget. Russian oil existed under 15-20 usd prices during the 90s and was perfectly fine along with the rest of the world. The only oil that didn't exist back then was American oil shale. But , as i said, it is not a problem anymore for them. It is cheaper to extract US oil shale then Venezuelan oil and its almost on par with Russia.

You are forgetting that this existed: Image
#15101138
JohnRawls wrote:.
You are forgetting that this existed: Image


No I have not,
This does not change the pattern or negate the realities of today. 80% of oil reserves are unprofitable below $60pb.

Oil companies right now are re-evaluating their value.
https://www.ft.com/content/2d84fc23-f38 ... 8f47e1ea09
'BP will slash up to $17.5bn off the value of its oil and gas assets after taking a more downbeat view of longer-term oil prices '

US fracked oil has never been profitable. It is simply a Ponzi scheme that uses the oil to service the debt. As my link showed, that debt is now becoming unsustainable and the market is shrinking. Currently they are being downgraded by ratings agencies to junk, record bankruptcies and propped up by government bailouts.

Those with money have got the message, Saudi Arabia have recent tendered for 59GW of renewables showing that even those most reliant on oil sales are aware.
#15101141
BeesKnee5 wrote:No I have not,
This does not change the pattern or negate the realities of today. 80% of oil reserves are unprofitable below $60pb.

Oil companies right now are re-evaluating their value.
https://www.ft.com/content/2d84fc23-f38 ... 8f47e1ea09
'BP will slash up to $17.5bn off the value of its oil and gas assets after taking a more downbeat view of longer-term oil prices '

US fracked oil has never been profitable. It is simply a Ponzi scheme that uses the oil to service the debt. As my link showed, that debt is now becoming unsustainable and the market is shrinking. Currently they are being downgraded by ratings agencies to junk, record bankruptcies and propped up by government bailouts.

Those with money have got the message, Saudi Arabia have recent tendered for 59GW of renewables showing that even those most reliant on oil sales are aware.


Your not even trying to listen. Basic rules of capitalism: supply and demand. If prices remain low then production will decrease and the price will start going up. Same goes for consumption of oil: If the price drops then the consumption will increase since it is cheaper and more effective compared to other sources.
#15101169
JohnRawls wrote:Your not even trying to listen. Basic rules of capitalism: supply and demand. If prices remain low then production will decrease and the price will start going up. Same goes for consumption of oil: If the price drops then the consumption will increase since it is cheaper and more effective compared to other sources.


I'm listening,
Prices go down, profits squeezed and many become unviable. prices go up and oil becomes uncompetitive.

net result is renewables replace fossil fuel over time as they are now the cheapest source of electricty generation.
#15101170
BeesKnee5 wrote:I'm listening,
Prices go down, profits squeezed and many become unviable. prices go up and oil becomes uncompetitive.

net result is renewables replace fossil fuel over time as they are now the cheapest source of electricty generation.


You are being overly optimistic as i said. Current production is large while price is very low. This is decreasing adoption of renewables, especially in places that do not invest a lot of time, money and regulations in to it: USA, Developing countries, India, China etc And those places are the most important ones to fight climate change. Even in Europe, it highly decentivizes Germany from switching from Gas to Renewables for example.
#15101225
JohnRawls wrote:You are being overly optimistic as i said. Current production is large while price is very low. This is decreasing adoption of renewables, especially in places that do not invest a lot of time, money and regulations in to it: USA, Developing countries, India, China etc And those places are the most important ones to fight climate change. Even in Europe, it highly decentivizes Germany from switching from Gas to Renewables for example.


You are repeating yourself without taking onboard the realities of the current situation.

USA renewables just overtook coal. Gas power is beginning to lose ground. Investment companies now recommend investing in renewables over fossil fuels due to poor returns in gas and oil. Thousands of wells are now stranded assets without the means to pay for clean up costs. Coal plants across the US are closing without ever being profitable because the future is only to accrue more losses.

India has one of the largest renewable plans in the world, having just awarded a 6GW plan to Adani. I could go on, but ultimately the variation in cost of gas or oil is a fraction of the cost of running these power plants, construction and running costs means most power stations take many years to become profitable while renewables are providing a return in a few years.

There is no decreasing adoption of renewables, the acceleration of adoption has slowed which is unsurprising considering how fast the rate has been.
US will add at least 51 GW in the next 3 years while fossil fuel generation will fall.
India are a real hotspot of renewables and the low oil price has done nothing to change that
https://www.climatechangenews.com/2020/ ... lar-power/

China has now capped coal and announced a big spend on renewables in only the last couple of days.

This is the reality, electricity generation is increasingly moving to renewables, transport is increasingly moving to electric.
The last bastions of fossil fuels will soon be flying and heating. The fossil fuel industry will shrink as a result.
#15101230
Maybe the EU or the US could borrow their title from the "Leap Manifesto" proposed (and going nowhere) in Canada several years back. Yes that's right, a group of Canadians including many famous musicians invoked the language of Mao's "Great Leap Forward" and "The Communist Manifesto" to argue for progressive change. I wonder why the proposal went nowhere? :excited:

https://leapmanifesto.org/en/the-leap-manifesto/
#15101297
BeesKnee5 wrote:The last bastions of fossil fuels will soon be flying and heating.


The only way of using green energy in aviation and shipping and in fuel-intensive industries such as steel making is by developing the hydrogen economy. Germany is going to pump billions into developing the green hydrogen economy:

Germany plans to promote ‘green’ hydrogen with €7 billion

The German government adopted its national hydrogen strategy yesterday (10 June), with plans to ramp up production capacity to 5 GW by 2030 and 10 GW by 2040. To achieve this, €7 billion will be invested in new businesses and research.

When he presented Germany’s hydrogen strategy in Berlin yesterday (10 June), economy minister Peter Altmaier (CDU) called the 28-page document the “greatest innovation since the EEG”, a reference to the landmark German renewable energy sources act which came into force in 2000.

With this “quantum leap,” Germany wants to become the world leader in hydrogen technologies, added Altmaier, who was speaking alongside three other ministers.

This is the first time that Germany has set itself quantitative targets for the production of hydrogen.

By 2030, Germany aims to have generators with a total capacity of up to 5 GW, which corresponds to hydrogen generation of about 14TWh. By 2040, capacity should be increased to 10 GW.

Powered by offshore wind

Most of the energy required will be provided by offshore wind farms, while the 14 TWh would require about 20 TWh of green electricity.

The Social Democrats (SPD) had demanded twice that amount. However, when the federal government presented its economic stimulus package last week, the cabinet quickly reached an agreement.

Of the €130 billion promised in the economic stimulus package, €7 billion will now be spent to create a demand-driven market for hydrogen produced at competitive costs.

So far, the production of hydrogen from renewable energies has only been possible in small quantities in so-called “real laboratories” that determine how electrolysis can be scaled up.

In addition, the German government is providing €2 billion for international partnerships, for example with North Africa, where it has already concluded several agreements to participate in production facilities there.

And a 25-member national hydrogen council consisting of industry, science and civil society representatives will provide regular advice to the government.

The hydrogen strategy is accompanied by an action plan containing 38 measures. They include creating better conditions for renewable energies and more attractive conditions for the construction of offshore wind farms.

“Whoever says yes to hydrogen must also say yes to wind energy. That is why we must and will consistently expand renewable energies,” Environment Minister Svenja Schulze (SPD) stressed yesterday (10 June).

Demand quotas in aviation

Hydrogen will be used first where processes cannot be electrified – for example, in heavy goods transport, steel production, the chemical industry and aviation.

Companies in these sectors will receive financial aid if they invest in electrolysis plants to transform their production processes. To this end, a pilot programme for so-called Carbon Contracts for Difference (CfD) will be launched, which is aimed at the steel and chemical industries.

Hydrogen will also be used in the transport sector, an idea that was originally rejected by the environment ministry. And to support the production of renewable energies, infrastructure for hydrogen refuelling, among other things, will be established.

In addition, the German government wants to examine whether a 20% quota for renewable energies in aviation can be implemented by 2030.

For Oliver Krischer, deputy chairman of the Green Party, this point is essential: “Large production capacities are to be built up without it being clear who will buy this hydrogen in the first place”. Mandatory blending quotas are needed, for example in air traffic or in the natural gas network.

However, according to him, hydrogen is misplaced in the automotive sector.

“The planned money for hydrogen filling stations is wasted money, because electric cars are much cheaper and their efficiency cannot be matched,” he said.

Subsidies for green hydrogen only

The debate over how much “green” hydrogen produced from renewable energies should be promoted in Germany was particularly controversial. 99% of hydrogen today comes from fossil fuels and the oil and gas industry argues that the “grey” sort produced from natural gas should also play a role, at least in the initial stages, in order to ramp up production.

In the end, a compromise solution was found: Although the German government strongly promotes green hydrogen, it does not exclude the “grey” sort.

“We will of course experience transitional steps when we replace grey with green hydrogen,” Altmaier said.

The strategy also anticipates a Europe-wide hydrogen market to develop in the next ten years, where “blue” and “turquoise” hydrogen will also be traded. Both “blue” and “turquoise” hydrogen are produced from natural gas. But while “blue” hydrogen uses carbon capture and storage to burry CO2 emissions underground, “turquoise” uses pyrolysis to separate hydrogen from natural gas, leaving solid carbon as a by-product instead of CO2.

Since Germany is integrated into the EU’s energy networks, “CO2-neutral hydrogen will also play a role in Germany and, if available, will also be used on a provisional basis”.

Germany has declared the creation of a European hydrogen infrastructure as one of the greatest priorities of its upcoming EU Council Presidency, in the hope of establishing itself as an export champion in the coming years.

“Green hydrogen technologies should soon bear the ‘Made in Germany’ seal”, said Research Minister Anja Karliczek (CDU).

Representatives of the business community and civil society have largely welcomed the strategy and praised the strong focus on green hydrogen.

At the same time, the long negotiations within the government highlighted the difficulties in transitioning away from fossil-based hydrogen.

The German hydrogen strategy shows that one of the world’s largest fossil gas consumers is preparing for a future without it,” wrote Felix Heilmann, a researcher at the climate think tank E3G, who added that electrification and energy efficiency must be pushed forward simultaneously.


Germany already has the first hydrogen-fueled trains up and running. Trucks and buses also run on hydrogen.

World's first hydrogen train rolls out in Germany

Image

@JohnRawls, the pandemic is going to put the last nail into the coffin for the coal industry. Many coal operations won't reopen after the slump in demand and the confined spaces of the coal mines are an ideal breeding ground for the virus. Even Poles star to have second thoughts about coal.
#15101303
It's an important point you make Atlantis.
Places like Germany are spending significant sums to kick start their economy after the pandemic.

They are focusing much of that money on greener alternatives.
€9,000 towards any EV costing less than €40,000 is going to make a big difference to sales at the bottom end of the market.
#15101311
BeesKnee5 wrote:It's an important point you make Atlantis.
Places like Germany are spending significant sums to kick start their economy after the pandemic.

They are focusing much of that money on greener alternatives.
€9,000 towards any EV costing less than €40,000 is going to make a big difference to sales at the bottom end of the market.


Listen. Yes Europe is spending money on renewables but that is not the case everywhere. USA approach is for it to happen naturally through capitalism for a lack of a better word. A lot of places do not even have the money to spend on this compared to Europe. US has just taken another approach.

I understand what you are saying to a degree but you are closing your eyes to the reality of things outside of Europe. Even your argument doesn't work for the US.

Regarding coal, well it has been on the decline for the last couple of decades in Europe and US. Precisely because it is more costly now due to regulations and general availability in Europe and US. Renewables are being implemented more and more but there is a limit because politicians can't just say "We are going to tax you more just to go renewable energy". That will be a freaking riot. 80% of the population are not going to accept that. The other 20% who like the idea or have the money so they don't care are not the problem here.

Just to clarify, there is not going to be decrease in renewable energy. There is going to be a decrease of the TEMPO at which they will be implemented. With low gas and oil prices, instead of achieving our green energy goals by 2050, we will still be struggling in 2075 even in Europe. The rest of the world is a whole different story.
#15101312
JohnRawls wrote:USA approach is for it to happen naturally through capitalism for a lack of a better word

I understand what you are saying to a degree but you are closing your eyes to the reality of things outside of Europe. Even your argument doesn't work for the US


To quote Lazards 2019 LCOE

United States Energy generation costs MWh

Utility solar $31-$111
Gas Peaker $122-162
Wind $24-$46
CCGT $41-$59

A break down of a gas peaker costs $28-34 is fuel. For a CCGT it's $21-$24 fuel. Even if fuel costs were zero they'd still be struggling to compete.

There is no fossil fuel that generates electricity cheaper than renewables in the US. The only reason gas has a place is due to intermittency and peaker plants are very inefficient, which is why storage is likely to eat into their market share.

As I highlighted, capitalism in the US is investing in 51GW of renewables over the next 3 years whilst fossil fuel sources are reducing.
#15101316
BeesKnee5 wrote:It's an important point you make Atlantis.
Places like Germany are spending significant sums to kick start their economy after the pandemic.

They are focusing much of that money on greener alternatives.
€9,000 towards any EV costing less than €40,000 is going to make a big difference to sales at the bottom end of the market.


There is also the industrial angle. Manufacturing of mass produced electronic devices including semiconductors, solar panels, solar batteries, etc., has moved to Asia during the last 40 years. Rather than trying to bring back manufacturing in this field by subsidizing domestic companies, it's better to take advantage of the low price of Asian manufacturers. The investments for retooling in this industry are too high and the profit margins are too slim due to intense competition.

Europe should instead focus on fields were it still has an edge, like wind energy, and put resources into developing hydrogen technology. Anyways, aside from solar technology, there is a wide field of green technologies, such as recycling, etc., which have tremendous growth potential and which require innovative and custom made solutions. High-wage regions like Europe need innovative custom-made applications rather than mass production.

@JohnRawls, Germans have accepted to pay substantially higher energy prices than others. The pioneering of solar energy in Germany has increased production of solar cells and decreased unit cost. The lower cost now helps others, including the 3rd world, to switch to renewable energy.
#15101324
BeesKnee5 wrote:To quote Lazards 2019 LCOE

United States Energy generation costs MWh

Utility solar $31-$111
Gas Peaker $122-162
Wind $24-$46
CCGT $41-$59

A break down of a gas peaker costs $28-34 is fuel. For a CCGT it's $21-$24 fuel. Even if fuel costs were zero they'd still be struggling to compete.

There is no fossil fuel that generates electricity cheaper than renewables in the US. The only reason gas has a place is due to intermittency and peaker plants are very inefficient, which is why storage is likely to eat into their market share.

As I highlighted, capitalism in the US is investing in 51GW of renewables over the next 3 years whilst fossil fuel sources are reducing.


Highly dubious numbers because a) gas is very cheap right now in the US due to oil shale production b) I did research on the subject before. The outcome of which is that those numbers seem to be realistic only for specific regions like California and Texas depending on weather conditions for generation through Wind, Sun, etc. Not all places are equal in this regard. Europe on the other hand is fucked, especially in the sun category.

So if you want to consider generation electricity in Texas, California, Florida etc where it is really cheap then you need to factor in the costs of creating storage and general infrastructure. Along with the loss due to distances and storage. Which ramps up the cost significantly and is the main real problem nowadays.

Here is an example:

Sun:
There is a 2-3 fold differences between the most imporant areas in the US. For Europe it is 3-5 fold compared to the most productive.
Image

Wind:
Again, there is a difference of several fold depending on where you live.
Image

So when you talk about conventional vs renewables. Conventional can be built close to demand. Renewables need to be built in specific places. Then there needs to be infrastructure to move it and store it and account for losses during storage etc. Then there is the question of sageguards of infrastructure breakdowns and alternatives.
#15101330
JohnRawls wrote:.

Your interpretation of Europes renewable capacity and costs are simply false.

The renewable mix will always vary based on location, interconnectors will always join that mix.

UK for example has connections either planned, developed or under development to:
Iceland (geothermal)
Norway (hydro and biomass)
France ( Nuclear)
Belgium /Netherlands (Wind)
Ireland (Wind)
Spain (Solar).

Adding to what is a significant wind, solar and nuclear capacity of its own.

UK solar LCOE was £50-£60/MWh in 2019, wind £45 MWh.

So you can see that even at higher latitudes solar is competitive, if anything it's complementary as peak solar generation occurs May-August while wind is more productive September-April. This is something your charts are unable to convey and therefore lead you to the miscomprehension that solar isn't viable in Europe.
#15101333
BeesKnee5 wrote:Your interpretation of Europes renewable capacity and costs are simply false.

The renewable mix will always vary based on location, interconnectors will always join that mix.

UK for example has connections either planned, developed or under development to:
Iceland (geothermal)
Norway (hydro and biomass)
France ( Nuclear)
Belgium /Netherlands (Wind)
Ireland (Wind)
Spain (Solar).

Adding to what is a significant wind, solar and nuclear capacity of its own.

UK solar LCOE was £50-£60/MWh in 2019, wind £45 MWh.

So you can see that even at higher latitudes solar is competitive, if anything it's complementary as peak solar generation occurs May-August while wind is more productive September-April. This is something your charts are unable to convey and therefore lead you to the miscomprehension that solar isn't viable in Europe.


The charts show that. If you haven't noticed it has yearly totals and averages. So it accounts for that. I don't really understand your argument anymore though. The whole idea that i presented to you is that cheap oil and gas will decrease the tempo of renewable implementation. Now you are just arguing that renewables are more or less competitive. I never denied all of that.

Your argument was that cheap oil and gas will kill oil and gas industry which it clearly won't. Your argument was that cheap oil and gas will increase the tempo of renewable energy implementation. I told you that you are wrong regarding that and cheap oil and gas is actually bad for renewables. So i don't understand what you are arguing for anymore. You are just throwing random data points here and there.

The question remains the same: Do you think that cheap oil and gas is bad for renewables? If no, then explain how those prices won't harm the speed of green energy implementation and why. Also address the point why countries like Africa, South America, India and China will tackle the whole situation of oil and gas being cheap and what is their incensitive beyond slogans to move to renewables. Where will they get the money for infrastructure?
#15101341
JohnRawls wrote:Wrong. Cost to extract in SA/Middle east is around 10 USD if not less. Shale oil nowadays is around 25 USD along with Russian oil.


You are pulling these figures out of thin air. Even if there are a couple of shale oil operators that can survive at 25 USD, most will go bankrupt before the barrel reaches 30 USD.

Few U.S. shale firms can withstand prolonged oil price war

“There are no good answers for the industry in a $30 per barrel environment,” Stephen Richardson, a shale analyst at Evercore ISI, wrote on Thursday in a report titled: “Let’s not fool ourselves, it’s all uneconomic and likely to stay that way.”


Even if ME oil producers have a low production cost, most need to charge a lot more to make ends meet because their economies depends on it.

Even supposing oil/gas prices stay low for some time, renewable energy costs are also falling. The more units get installed, the lower the price will go.

Renewable Energy Costs Take Another Tumble, Making Fossil Fuels Look More Expensive Than Ever

Wind power prices now lower than the cost of natural gas

Image

The introduction of floating offshore wind farms that can operate at a greater seabed depth will significantly increase the potential for wind energy.
Last edited by Atlantis on 19 Jun 2020 15:39, edited 1 time in total.
#15101343
JohnRawls wrote:The charts show that. If you haven't noticed it has yearly totals and averages. So it accounts for that. I don't really understand your argument anymore though. The whole idea that i presented to you is that cheap oil and gas will decrease the tempo of renewable implementation. Now you are just arguing that renewables are more or less competitive. I never denied all of that.

Your argument was that cheap oil and gas will kill oil and gas industry which it clearly won't. Your argument was that cheap oil and gas will increase the tempo of renewable energy implementation. I told you that you are wrong regarding that and cheap oil and gas is actually bad for renewables. So i don't understand what you are arguing for anymore. You are just throwing random data points here and there.

The question remains the same: Do you think that cheap oil and gas is bad for renewables? If no, then explain how those prices won't harm the speed of green energy implementation and why. Also address the point why countries like Africa, South America, India and China will tackle the whole situation of oil and gas being cheap and what is their incensitive beyond slogans to move to renewables. Where will they get the money for infrastructure?


I agree that you are failing to comprehend the nature of renewable sources. A tropical country will use solar, a temperate zone country will use a mix of solar and wind to complement each other. Neither of these combinations are more expensive than fossil fuels now.

Cheap oil and gas is bad for producers of oil and gas, those that are uneconomic close, those that remain suffer a drop in profit and reduce future investment to replace wells as their output falls. When the price rises due to output drops then the less volatile pricing of renewables outcompete, pushing the price down and preventing the large profits the oil giants once took for granted. However you slice it we have reached a tipping point, and at each turn the oil industry sees it's profitability fall. This is why many of those oil giants are diversifying, not because of some altruistic desire to save the planet.

The infrastructure costs to build renewables are hugely cheaper than that to build oil and gas and therefore as generation capacity is renewed or expanded then renewables win out. Regardless of the price of gas or oil this is the driving factor now.

India - 85% of all new power generation is wind or solar, last quarter gas capacity was unchanged and coal contracted.

China - renewables share of generation is still rising with an extra 29GW wind and an extra 39GW solar this year. That compares to 26GW solar and 26GW Wind last year.

Globally I expect last year was the peak for fossil fuel energy generation. Some countries will transition slower than others but it will happen because of economics.

It's interesting watching you shift the goal posts as I address each country. The truth as of 2019 is that renewables are cheaper than energy generated through fossil fuels and this gap is set to widen further.
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