Larry Elliot in the Guardian: “After a four-month respite in which equity markets rallied strongly and interest rates on bonds fell, the eurozone’s debt crisis is on again. Those who said the European Central Bank was merely putting a large piece of sticking plaster on monetary union’s open wound with its cheap credit policy have been proved right. Since the troubled period began at the end of 2009, there has been a clear pattern to events: crisis, response, respite, new crisis. The latest recovery has been robust, but it was always a fantasy to believe that the ECB could solve all the euro‘s problems with its long-term refinancing operations, ladling out ultra-cheap three-year money to European banks. ….The likelihood, however, is that the crisis will go on for much longer. That’s because the problems that have resurfaced over the past week have a deeper, structural cause: the flaw in the single currency that has left the weaker countries of the southern fringe deeply uncompetitive in relation to the powerful nations at the core. The traditional remedy – devaluation – is ruled out by membership of the euro, so the affected countries have no choice but to go for “internal devaluations”, which means making themselves more competitive by driving down wages, pensions and public spending.”
Solarcentury
The company I founded in 1998 to design and supply solar energy solutions for the built environment. Solarcentury
Solar Aid
The charity I founded in 2006, with a 5% contribution of Solarcentury profits, to help deliver solar lighting to Africa. Solar Aid
Barclays under investigation for rigging the California electricity market.
FT: “Barclays and four former traders are being investigated for allegedly manipulating Californian electricity markets, according to US regulators. The bank is alleged to have bought and sold electricity in enough volume to move exchange prices up or down to benefit parallel swap positions, the Federal Energy Regulatory Commission said in a notice published last week.”
Crowdsourcing of local solar projects solar projects grows in the USA.
Grist: “Solar Mosaic started using this “crowdfunding” model in 2010, and to date, the company has raised roughly $320,000 to fund five solar installations, including an array atop People’s Grocery, a food justice organization in Oakland, as well as the home of artist Shonto Begay on the Navajo Nation in Arizona. It’s similar to the microfinance nonprofit Kiva, which raises money for small businesses around the world. And, like Kiva, its loans are paid back sans interest — you put $100 toward the solar panels for St. Vincent de Paul, and you’ll get $100 back. / But Parish says that’s about to change. Starting this summer, the company will offer investment products that it estimates will pay 5 to 10 percent returns. These products will allow everyday people to get in on a booming business, he says. Bloomberg recently reported that Warren Buffett and Google are pouring billions into solar energy development, lured by 15 percent returns.”
“Eurozone crisis is back and here to stay”.
JPMorgan takes huge positions in credit derivatives that “resemble” proprietary bets.
Bloomberg: “JPMorgan Chase & Co. (JPM) trader Bruno Iksil’s outsized bets in credit derivatives are drawing attention to a little-known division that invests the company’s reserves and fueling a debate over whether banks are taking excessive risks with federally insured and subsidized money. …four hedge-fund managers and dealers say the trades are big enough to move indexes and resemble proprietary bets, or wagers made with the bank’s own money. The trades, first reported by Bloomberg News April 5, stirred debate among U.S. policy makers over the Easter-holiday weekend as they wrangle over this year’s implementation of the so-called Volcker rule, the portion of the Dodd-Frank Act that sets limits on risk-taking by banks with government backing.”
Ratings agencies could downgrade EDF & Centrica if they go ahead with UK nuclear.
This is Money.co.uk: “US-based Moody’s says building nuclear plants is risky because of the huge costs and uncertainties over future power prices. Britain’s nuclear programme is likely to cost EDF and Centrica £24 billion together. …Companies need a guarantee that prices will cover costs over at least 30 years. Experts reckon the price guarantee or subsidy would be worth about £2 billion a year or £60 billion over 30 years.”
“Households sink deeper into energy debt”: FT.
uSwitch: Up to 4m UK households may now be in debt to their energy suppliers because bills have doubled in 5 years.
“Australian investors begin to hedge carbon risk”: RE New Economy.
Giles Parkinson: “The move towards low-carbon investment portfolios has taken a small but significant step in Australia, with Industry Funds Management launching a new low-carbon, environmental, social and governance portfolio strategy, believed to be the first of its type to factor emissions intensity into an Australian investment product. ….this is believed to the first (in Australia) to offer a broad index portfolio that offers a hedge against carbon risk. It will certainly not be the last.” The first mandate is for $100m: a good start. “Nathan Fabian, CEO of the Investor Group on Climate Change, a group whose members manage more than $700 billion of funds, says …..the fund will allow an investor to start to hedge the risk of a “carbon bubble,” a term that has now become commonplace in Europe, particularly since the release of a report by the Potsdam Institute last year that highlighted the risk of a “carbon bubble” if the world finally took action, rather than talking about it, on limiting global warming to 2°C.”
Oil consumers ready to release stocks come Iran sanctions in July.
FT: “Talks between some of the world’s richest oil consuming nations over whether to release billions of barrels in emergency oil reserves are moving to a question of “when” rather than “if” to act. The view in the oil markets is that the US, UK, France and Japan are likely to agree soon on a release of their strategic petroleum stocks, to prevent crude prices soaring further when European Union sanctions on Iran are introduced in July. Benchmark Brent crude was trading at about $125 a barrel on Tuesday, a few dollars below the post-financial crisis highs it hit last month.” On all three occasions of release for stockpiles, the oil price has been contained.
US DoE responds to ASPO-USA: economics will come to the rescue.
Five months after ASPO-USA held a press conference on the steps of the US Department of Energy (October 2011), requesting a National Oil Emergency Response plan, DoE replies with a letter that offers a sanguine defence of position – “EIA’s analyses and projections are based on the economic principle that long-term energy supply and consumption are equilibrated through market prices” – and doesn’t even address their request for a meeting with Steven Chu.
North Sea: “Wells from hell are now operating on the limits of what’s an acceptable risk”.
Scotland on Sunday: “With the threat of an explosion still hanging over the Elgin platform, Dani Garavelli discovers growing concern over a hi-tech industry pushing the boundaries of what is achievable.” Thankfully, “Seven days on from the start of the incident, the sense of panic has diminished. Total says it believes the leak is coming from a disused well in a rock formation 4,000 metres below the seabed, not from a well that is currently producing gas. It is free of toxic hydrogen sulphide and consists mainly of methane, which disperses more easily.” The flare that had been left burning when is the rig was evacuated is extinguished. “The British government has been keen to encourage companies to drill in high-temperature, high-pressure fields, and is currently considering extended tax allowances as an incentive to companies to get involved. / When the Elgin/Franklin field was being developed, Total described it as “an unprecedented technical challenge” because of temperatures of up to 190C and reservoir pressures up to four times higher than the North Sea average. / But there are dangers inherent in operating in such extreme conditions. In 2005, a report for the Health and Safety Executive warned that, despite industry successes in overcoming the technical challenges, “there remains a general concern that not all high- pressure/high-temperature hazards have been identified yet.” / Total is well aware of these dangers. According to the Wall Street Journal, last year a report written by Jean-Louis Bergerot, a manager in Total’s drilling division for the Society of Petroleum Engineers, suggested the risks were growing. “In fields such as Elgin/Franklin, wells are exposed to multiple threats resulting from the large amount of depletion,” he wrote. “As gas is pumped out of the reservoir, its pressure drops relative to the surrounding rock, unleashing powerful stresses. The steel casing that lines a well can be buckled or deformed by movements in the rock. Eventually, the liner may become sheared off completely.”
Why President Obama can’t remove subsidies for Big Oil.
NYT editorial: “Despite pleading by Mr. Obama, the Senate on Thursday could not produce the 60 votes necessary to pass a bill eliminating $2.5 billion a year of these subsidies. This is a minuscule amount for an industry whose top three companies in the United States alone earned more than $80 billion in profits last year. Nevertheless, in the days leading up to the vote, the American Petroleum Institute spent several million dollars on an ad campaign calling the bill “another bad idea from Washington — higher taxes that could lead to higher prices.” The ads had four messages, all myths.
“Saudi Arabia resorts to Jedi mindtricks” on oil supply: FT Alphaville.
Olivier Jakob at Petromatrix: “It used to be that Saudi Arabia produced more oil when it wanted lower oil prices. Today, when Saudi Arabia wants lower prices it produces an op-ed in the Financial Times.” FT Alphaville: “It all does seem very counterintuitive. On the one hand Saudi is saying there is no supply shortage and stocks are at record levels. On the other hand it’s sending more crude to the United States. On the one hand you have high oil prices and the constant mumblings of SPR releases. On the other hand much of the analyst and academic community insists there’s no need for any emergency action. / So what is going on? / We’d be pleased to hear from anyone who can make sense of it.”
“Mobilizing society in the face of peak oil: a call to French Presidential candidates”.
French oil experts, including ex Total executives, publish an appeal in le Monde, translated in the Energy Bulletin.
IPCC releases full assessment report on climate risks and disasters.
IPCC: “Evidence suggests that climate change has led to changes in climate extremes such as heat waves, record high temperatures and, in many regions, heavy precipitation in the past half century, the Intergovernmental Panel on Climate Change said today …..in its Special Report on Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation (SREX). ….“The main message from the report is that we know enough to make good decisions about managing the risks of climate-related disasters. Sometimes we take advantage of this knowledge, but many times we do not,” said Chris Field, Co-Chair of IPCC’s Working Group II, which together with Working Group I produced the report.” The IPCC released the Summary for Policymakers (SPM) of the report in November 2011. …The SREX has assessed a wealth of new studies, and new global and regional modelling results that were not available at the time of the Fourth Assessment Report in 2007, its last major assessment of climate change science. Some important conclusions delivered by the SREX therefore include: – Medium confidence in an observed increase in the length or number of warm spells or heat waves in many regions of the globe. – Likely increase in frequency of heavy precipitation events or increase in proportion of total rainfall from heavy falls over many areas of the globe, in particular in the high latitudes and tropical regions, and in winter in the northern mid-latitudes. – Medium confidence in projected increase in duration and intensity of droughts in some regions of the world, including southern Europe and the Mediterranean region, central Europe, central North America, Central America and Mexico, northeast Brazil, and southern Africa.”
JL thought: “Improving as the global circulation models are, if we wait for all models in all national centres of climate research to agree, we will already be living in a 6 degree world.”
“Why baseload power is doomed”.
Chris Nelder, on SmartPlanet, Energy Futurist: “A persistent myth about the challenges of integrating renewable power into the grid is that because solar and wind are intermittent, grid operators need to maintain full generation capacity from “baseload” plants powered by coal and nuclear. Recent real-world data and research shows that not only is this not true, but that baseload capacity is fundamentally incompatible with renewables, and that as renewables provide a greater portion of the grid’s power, baseload generation will need to be phased out.”
“Why generators are terrified of solar” based on the German experience.
REneweconomy: “Here is a pair of graphs that demonstrate most vividly the merit order effect and the impact that solar is having on electricity prices in Germany; and why utilities there and elsewhere are desperate to try to reign in the growth of solar PV in Europe. It may also explain why Australian generators are fighting so hard against the extension of feed-in tariffs in this country. The first graph illustrates what a typical day on the electricity market in Germany looked like in March four years ago; the second illustrates what is happening now, with 25GW of solar PV installed across the country. Essentially, it means that solar PV is not just licking the cream off the profits of the fossil fuel generators – as happens in Australia with a more modest rollout of PV – it is in fact eating their entire cake.”
Saudi Arabia, pumping at 10 mbd, is “giving only verbal assurances”.
FT: “Saudi Arabia says it has the capacity to raise production by 2.5m b/d if markets need it. The problem, says Ed Morse, head of commodities research at Citigroup, is that “the market is seeking transparency, and all the Saudis are giving is verbal assurances”. The kingdom is already pumping at a three-decade peak of 10m b/d, and increased exports last month by 150-300,000 b/d, according to the IEA.”
“Soaring oil prices risk recession”: FT.
Supreme Court kicks out DECC appeal on feed-in tariffs.
ClickGreen: “Jeremy Leggett, Chairman, Solarcentury said: “The Supreme Court has today confirmed that the Government simply has no grounds to appeal the decision that its handling of solar Feed-in tariffs was illegal. This final step in the legal process has wasted much needed time and money and now we, the renewables industry, simply want to get on with creating our clean energy future. Renewables can only play the pivotal role necessary to deliver a new green economy if we have a stable market and investor confidence backed by lawful, predictable and carefully considered policy. I hope the Government is now clear that it will be held to account if they try to act illegally and push through unlawful policy changes. We would much prefer not to have taken this path but Ministers gave us no choice. Our hope now is that we can work together again to restore the thriving jobs-rich solar sector that has been so badly undermined by Government actions.” More in the Guardian.
“We are trying to grow a business in a minefield”.
E2B Pulse: ““Disastrous” solar Feed-in-Tariffs, the “cavalier irresponsibility” of bankers, and a government that is “mortgaging the future” – Jeremy Leggett is a man with strong opinions. In an exclusive interview with E2B Pulse’s News Editor James Kershaw, Solarcentury’s Executive Chairman argues there’s a war raging against the UK’s renewable energy industry – one that he’s prepared to fight.”
US solar developers now attracting investors including Google and Buffett.
Bloomberg: “U.S. solar developers are luring cash at record rates from investors ranging from Warren Buffett to Google Inc. (GOOG) and KKR & Co. by offering returns on projects four times those available for Treasury securities. Buffett’s Berkshire Hathaway Inc. (BRK/A) together with the biggest Internet search company, the private equity company and insurers MetLife Inc. (MET) and John Hancock Life Insurance Co. poured more than $500 million into renewable energy in the last year. That’s the most ever for companies outside the club of banks and specialist lenders that traditionally back solar energy, according to Bloomberg New Energy Finance data.”
US & UK float prospect of emergency release of oil stocks from reserve.
Reuters: “Britain is poised to cooperate with the United States on a release of strategic oil stocks that is expected within months, two British sources said, in a bid to prevent fuel prices choking economic growth in a U.S. election year.” Price falls $4 on the news. The White House then denies this is an option. Gasoline prices are at near record levels in the US.
“Energy giants pocket £168 a second despite big dip in power use and wholesale prices”.
This is money.co.uk: “Mark Todd, at comparison site Energyhelpline, has calculated that since September wholesale gas costs have fallen by 10 per cent and wholesale electricity has fallen 13 per cent. This could have led to a 7 per cent fall in gas bills and a 9 per cent fall in electricity bills had savings been passed on. Instead, tariffs were cut by only 2 per cent on average — netting the firms an extra £80 a year per customer.”