The Migrant Crisis, Robots, Global Warming and the Inconsistency of the Media

Reading and believing the Mainstream media these days requires you to believe several different and conflicting positions / theories at the same time. It seems they have lost all sense of consistency in their urge to be politically correct.  

This video looks at some recent discussions in the media :

The French - Irish Interconnector

Pat Swords on the proposed Interconnector from Ireland to France :

JP Morgan famously said: “A man has two reasons, the good reason and the real reason”. Thought about that today when I saw the latest spin from Eirgrid, i.e. spending €1 billion of our money, which was of course for our wonderful benefit:

http://www.independent.ie/business/irish/eirgrid-plans-1bn-power-link-to-france-35445723.html

One has to laugh at the total ignorance of the press, do they ever actually think about the crap they write, although if we had to pay to read it like in the past, nobody really would anymore.

This €1 billion interconnector to France is to power 450,000 homes and increase security of supply, which is a bit daft, as we already have a system, which does that and has been ultra reliable for decades, so why do we need to spend another €1 billion on another one to do the same thing?

Yes France has a lot of cost competitive nuclear, but when the cold weather hits France, their electricity consumption soars, as they have a lot of domestic electric heating. If you don’t believe me watch the dial on the top left when the cold weather comes in, they are really struggling to match demand during these periods: 

http://www.gridwatch.templar.co.uk/france/

When the cold weather hits France it often hits here too. So if we bring in French nuclear off peak and at competitive prices, this is a short term gain, but means that some of our existing generation capacity will simply in time shut up shop. So what happens then when it gets real cold? Of course the French will suffer blackouts, as the lovely new interconnector keeps sending French electricity to Ireland. After all there is plenty of precedent of such issues and how we can rely on the EU’s trading ‘rules’ when the ‘chips are down’:

http://www.novinite.com/articles/178804/EU+Commission+Questions+Bulgaria's+Move+to+Halt+Electricity+Exports+in+January

Maybe people will smell the coffee when the power eventually comes back on and they can brew it?

So let’s get down to the real reason, which one will never get from the so called professionally paid news media. One has to ferret it out oneself, such as using the Aarhus information rights utilised effectively in the article above. However, isn’t it amazing how our so called ‘public servants’ (don’t make me laugh), try every trick in the book to obstruct citizens seeking information, even to the point of breaking the laws, which apply to them?

With regard to this wonderful interconnector, it is part of the EU’s Projects of Common Interest, which has been part of a long drawn out Communication at UNECE, which is in its final phase with the draft findings and recommendations likely to be out this spring. The EU fought tooth and nail, right to the head civil servant in the EU Catherine Day (wouldn’t you know it Irish!), that nobody would have access to information relating to the justification for these projects. However, go to Annex 6 of the Communication and Questionnaire for E 153 – Grid Link (page 83/119 of the pdf)

https://www.unece.org/environmental-policy/conventions/public-participation/aarhus-convention/tfwg/envppcc/envppcccom/acccc201396-european-union.html

“This investment is planned primarily to facilitate the integration of 1,283 MW of wind generation in the south of the country. This is approximately equivalent to 0,054 GW/1000 km2 based on GW of additional wind installed within county boundaries. Because of the favourable wind conditions on the island of Ireland and offshore there is interest (evidenced by applications for grid connections) in developing renewable generation capacity well in excess of what is required for native demands. The connection of such capacity can only be facilitated if further interconnection is installed to provide access for this generation to the British and continental European markets, in addition it will facilitate future interconnection to Great Britain or France.”

One of the things that is strikingly clear, is that the Irish grid system can’t take more wind without a major build-out, which includes more interconnectors. So developers may well get their planning for wind turbines, but the realty of project completion and operation hinges on other developments in grid infrastructure, including those interconnectors. The East West interconnector, linking Malahide to the Welsh grid, cost Irish consumers over €600 million and the UK consumers not a cent. It was raised, but not addressed in the first Communication I brought in 2010 to UNECE.

For instance, the below from what is a ‘Green tinged (and funded) German think Tank’:

Social cost benefit analysis of interconnector investment: A critical appraisal
Bremen Energy Working Paper No. 02, July 2010 (published in Energy Policy, 39(6), 2011, pp. 3096-3105.) Michiel de Nooij

Abstract

“Some, like the European commission, claim that Europe needs more transmission capacity and interconnectors. This paper studies interconnector investment decisions from the perspective of a social cost benefit analysis (maximising total welfare in a country). For two European decisions to build an interconnector (NorNed and the East West Interconnector) the analysis underlying the decisions is discussed in detail, and will be compared with lessons from theory and decisions made in other jurisdictions (Nordel, California and Australia). The key findings are that (i) it is unclear how much demand for transmission capacity and interconnectors there actually is, and thus how large the benefits of investing will be. (ii) Both studies analyzed are not correct. Main criticism includes that they do not take the reaction of producers to new interconnection capacity into account; ignore part of the potential benefits of more competition; and make a strange assumption with respect to discounting. (iii) Decisions in Europe are taken very differently, leading to situations in which approval of an investment might depend on who has to approve. (iv) Therefore, it is unlikely that interconnector and transmission investment decisions in Europe currently are maximizing social welfare. Some lessons for future cost benefit analysis are drawn.”

In other words, the figures were a fudge and there was no rational economic justification for it, it all came down to ‘who has to approve’!

This same point came up with the Irish Academy of Engineering’s report in 2009:

http://www.iae.ie/publications/publication/review-of-irelands-energy-policy-june-2009/

“1.2.3 East­West Interconnection (EWIC), In July 2006, the Irish Government decided to construct an interconnector from Ireland to Great Britain. It would appear that this decision was taken without the benefit of a robust techno‐economic study or cost benefit analysis.  

In addition it is not clear that the main benefit, the “capacity savings”, amounting to some €40m annually out of a total annual benefit of €66m, would be attainable under current market rules, as the benefit would appear to imply 100% usage of the interconnector. The Academy understands for example that during 2008 the usage factor on the Moyle interconnector was approximately 14%. This would appear to indicate a much lower likely benefit from EWIC.”

Looks like Eirgrid are happy to dismiss these issues for their projects on the basis that the punters and decision makers (a shower of punters with our money) only read the crap in the Irish Independent, etc., which is a reproduction of what they feed the lazy journos in the first place.

God help us from all this stupidity and the appalling mess it leaves behind, as if we didn’t have A&Es and hospitals crying out for investment, etc.

French Grid Case Study - 20th January 2017

Figure 1

Figure 2

On 20th Jan, as demand hit 93.8GW (Figure 2), France was dependent on over 4.5GW of imports (Figure 1). In previous years, France was a net exporter. At the same time in Ireland, wind was only at 30% of max output leaving nothing for export if an interconnector to France was in place. Most likely French grid operators were engaging in load shedding to prevent blackouts - see here for more details 

The End of the Traditional Media ?

                                            Humans are 90% irrational - Scott Adams

It's been an extraordinary year in politics as event after event proved the "experts" and the media wrong. The above article appeared in an Irish newspaper back in August. The article below about climate change appeared in the same newspaper a week later. Both pieces suffer from a distinct lack of critical analysis and instead focus mostly on emotion and even hysteria. This approach does sell newspapers as Scott Adams says humans are mostly irrational. Once the irrational idea that Trump could not win the election took hold, this then evolved into a mass hysteria where even the bookmakers became hoodwinked. Not alone did they lose big on the Trump victory, they paid out on a Trump defeat before the actual result came in ! Rational and clear analysis becomes almost impossible in such an environment and even intelligent people succumb.

In such environments (mostly created by the media), the media will seek to reinforce how we feel about the issue by saying "Relax" or in the case of the climate "Worry". At this stage, we have moved from being 90% irrational to 100% irrational. All doubt has been removed. Only the sudden shock of reality can make us see sense.

Back in 1968, an English man had the crazy idea about transferring news and information across wires and into TV screens and even on to computers. It turned out to be very prescient.   

.

The internet means you can get different opinions and analysis and make up your own mind. If you prefer the emotive stuff, you can still find that online. If you prefer critical analysis and debate then you can find that too which before was not as accessible. Articles can be instantly fact-checked and updated to give the most accurate assessment at that time.  

President Elect Trump had a significant online presence, much bigger than that of his opponent. Turns out that was not something to "Relax" about. The old print media is now looking increasingly irrelevant.  We may be seeing it going extinct in the near future. Something they will certainly be "worried" about.

Irish Energy Blog was right ! - Eirgrid revise down demand forecasts

Back in May of this year, Irish Energy Blog published an article questioning Eirgrid's demand forecasts. It was the only media outlet, as far as I can tell, in the country to do so :

In Eirgrid's recent capacity statement, given a recovery scenario, demand for electricity by 2019 is forecast to equal demand at the height of the boom and after this it is forecast to exceed these levels. Ireland, like the UK, has a low energy to GDP ratio. We barely manufacture anything here, most of it is outsourced to China and India, so what exactly are Eirgrid expecting ? Perhaps there will be another industrial revolution, this time in Ireland. But in any event, I will put my blogger reputation on the line, and predict that these demand levels will not materialize. The rising cost of electricity for industry will surely drive any heavy industry out that might consider re-locating here - Irish Energy Blog, May 2015.

Many, if not all, reputable Irish newspapers published the view that new grid infrastructure was essential for increased demand without any question:

Others have identified “hidden” network costs they argue are necessary to facilitate wind. It is true that Ireland is currently modernising an electricity network that for many years suffered from chronic underinvestment. Current investments also support traditional generation, increased demand in the regions, and indeed a more responsive, intelligent and modern grid generally - Joseph Curtain, Irish Times March 2015.

Launched in October 2008, Grid25 is based on energy demand growing in the coming years - Paul Melia, Irish Independent, November 2014. 

The CEO of Eirgrid has now confirmed that Irish Energy Blog was in fact right :

Before the crash, construction made up a significant proportion of the GDP growth in the economy. I think we are all acutely aware that before the crash it accounted for more than 20% but now it is below 10%. What is driving economic growth today is very different. That in part is a reason the relationship between GDP growth and energy growth has changed. One no longer gets the close correlation we had in the years between 2000 and 2007 between GDP growth and energy growth. The make-up of the economy is different and cost competitiveness has become a significant focus for industry. Energy has become one of the areas where businesses have become acutely conscious of the need to manage their costs to ensure competitiveness. We only have to look at yesterday's announcement of the unfortunate closure of the Michelin plant in Ballymena to understand the impact of cost competitiveness on the sustainability of businesses. Businesses are much more conscious of managing energy costs. We are seeing the new standards in housing coming through in the new housing stock, so the use of energy per unit of residential housing is not as good. For all those reasons growth rates in energy are now not as correlated with growth rates in GDP - Fintan Slye, November 2015.

The reference to GDP is very interesting, this blog made that exact same point last May - Ireland, like the UK, has a low energy to GDP ratio.

The draft strategy reflects the change in economic circumstances and where we as a country, an economy and a society are now. When first developed in 2008, Grid 25, as it was then named, which included plans for the Grid Link project, was designed to ensure the electricity grid would continue to support the Celtic tiger economy with its high economic and energy growth rates. The past five years have changed that reality. There has been demand reduction to the point where estimated demand levels for 2010 will not materialise until 2025 - a 15-year delay - and, even then, growth rates will be less than a third of the rates previously forecast - Fintan Slye, November 2015.

This blog also pointed out this very fact - Grid 25 was based on the below graph - it didn't take a genius to figure out that things had changed since :





However, I still wonder whether the pylons will be required for wind farms in this region should they get planning. I would imagine the answer to that question is Yes. Do Eirgrid envisage that these wind farms will not receive planning permission ? The original document from which the above graph was taken is now unavailable and so one can't check but for certain I can remember reading in it that connection of renewables was another justification for the project.

Eirgrid's current statement on Grid Link seems to confirm that they are still accounting for more wind farms :

The Irish government committed to the EU that 40% of electricity generation would come from renewable sources by 2020. To achieve this target, EirGrid needs to connect significant levels of renewable energy in the south and east. As a result, we must improve the transmission grid in this area. We can then bring this new power from renewable sources and supply it to the entire country.

Finally, it's important to note EirGrid's legal obligation to connect electricity generators. As the national electricity transmission system operator for Ireland, we have a statutory function. Subject to direction from the regulator, this statute requires us to offer a connection to the grid for those who request it. When an electricity generator accepts our connection offer, we have to meet their needs. This means we are legally required to develop the grid in response to plans for new electricity generation, such as wind farms.

The Green Bubble - are we heading for another crash ?

London financier warns of impending Green Bubble 

In an earlier blog, I showed that there are clear signs of an energy bubble in Ireland. In the above video, Per Wimmer speaks about an international green bubble. With banks leveraging up to 80% of the green industry, are our banks once again over-exposed to an over subsidized sector ?

We have around 2,000MW of wind energy in Ireland and it costs around €1 million to install a MW of wind. So that works out at a total capital cost of €2 billion. My own investigation into company accounts in Ireland shows that the 80% leveraging figure applies in Ireland too. This means Irish and EU banks are exposed to €1.6 billion in loans to the wind industry in Ireland**. The means to repay these loans is entirely dependent on REFIT, PSO and the other subsidies for wind energy which the consumer pays through electricity bills that are among the highest in Europe.

There are so many similarities between the green bubble and the credit bubble that it's almost scary - Per Wimmer

Investors in property were able to avail of a myriad of tax reliefs throughout the housing boom and once again investors in wind energy can also receive tax relief in the form of EII (Employment and Investment Initiative).  The housing boom was characterized by disproportionately high property prices and the green boom is likewise characterized by our disproportionate high electricity prices. There was a strong reluctance from commentators and the media to report independently and fairly on the housing boom. We can also see a very similar Group Think mentality with regards to wind energy.

Another interesting similarity is the lack of regulation. We have an energy regulator who is powerless to prevent the high electricity prices and green subsidies / levies, unlike in the UK where he can at least hold energy companies to account. And whilst the lobby groups main complaint during the boom was "too much financial regulation", in an Irish Wind Farmers Association / AIB document titled 2020 Energy Finance, it is stated that "to unlock more [wind energy] funding we need to remove regulatory barriers".

The only attraction for banks is the guaranteed income from wind energy in the form of subsidies, but how long realistically can households and industry keep funding this ?  As Per Wimmer points out, this is hardly sustainable green energy. In the latest PSO Levy Decision Paper, the regulator pointed out that cheap gas prices resulted in a lower wholesale price. But what will happen when the price of gas rises in tandem with the rise in wind energy subsidies in the next few years ?

Are we going to see another financial collapse or will we keep feeding the beast ?