James Conca “Just Plain Stupid”

James Conca somehow got a platform at Forbes to publish a collection of anti-renewable pro-nuclear falsehoods with the title “Germany – Insane or Just Plain Stupid?”. Thanks to this Tweet by Fossil Nuke Rod Adams for the link.

He needed a comment to point out that the Green Party is actually not in the government coalition. At least he corrected that falsehood.

But he still insists that “The average household in Germany will be paying almost double for energy next year compared to last year” and that “Electricity costs are going up more rapidly than expected because Germany failed to integrate this EEG plan into the larger infrastructure development needed to implement it.”

Meanwhile, in reality, electricity costs for industry are down in Germany in 2011. And the idea that electricity costs for households might double has just about the same comedic value as that of the Green Party being in the government coalition.

James Conca has no idea what he’s talking about.

Related post: James Conca Misinformed and Just Plain Lazy, September 9, 2012, with link to an article by Craig Morris debunking some more of his false claims.

 

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

11 thoughts on “James Conca “Just Plain Stupid”

  1. Electricity prices for industrial customers are not necessarily reflective of the cost of production, especially in the case of unreliable power sources where the capital was provided by taxpayers and mandates.

    German industrial electricity prices have indeed fallen in recent months, but Reuters analysts blame that on low expectations for industrial output.

    http://www.reuters.com/article/2012/06/20/us-germany-economy-power-gdp-idUSBRE85J0VP20120620

    As you pointed out, households are about 1/4 of the German electricity market yet they are on the hook for nearly all of the costs associated with paying feed in tariffs that are several times the wholesale market price for certain politically accepted forms of power.

    If I was a German consumer, I’d be pretty angry.

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  2. Karl, the eurostat page probably quite precisely reflects the price, but in another post you said the merit order was lowering prices for the industry which is not precisely true.
    The merit order affects the spot price on EEX, but most of the industrial electricity is sold in advance, at prices that can be affected by the spot price, but do not directly reflect them.

    The RWE report contain a lot of information about what truly happens on the energy markets, that I think you should read.
    The general link is here http://www.rwe.com/web/cms/en/280030/rwe/investor-relations/reports/2012/
    The latest first half 2012 report is here : http://www.rwe.com/web/cms/mediablob/en/1528080/data/280030/6/rwe/investor-relations/reports/2012/RWE-report-first-half-2012.pdf
    As RWE says; the spot price does not directly reflect their selling price since they “sell forward nearly all of the output of our German power plants and secure the prices of the required fuel and emission allowances in order to reduce short-term volume and price risks”. So their base-load and peak-load price for 2013 were down €5 et €6 which is significantly less than the reduction in spot prices.

    There’s also that document that showed that in march 2012, RWE had already sold 30% of it’s future 2014 production, and 60% of the one for 2013

    Click to access Charts-of-investor-and-analyst-conference-Q1-2012.pdf


    And there on page 12, we see some people were ready to buy energy for 2014 at more or less the same price as 2012, in order to be sure to receive it.

    It also interesting to read in the report, from the horse mouth, that RWE is increasing it’s sale of lignite power, because as the value of CO2 certificates goes down, it becomes more and more profitable to sell it instead of nuclear. And that Poland is the one that blocked the efforts to reduce their emission, making CO2 cheaper.

    And there’s another article, that you will hate ;-), from Spiegel affirming that renewable are making the German grid more and more instable, which forces industrial to buy costly back-up and leads them to threaten to leave Germany if this goes on :
    http://www.spiegel.de/international/germany/instability-in-power-grid-comes-at-high-cost-for-german-industry-a-850419.html
    I don’t know much of it is correct, but I did already see some reports of grid instability.

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    1. The last time I wrote about merit order effect, I stated this:

      “At the industrial level (the most important segment of the market) prices are falling, since heavy users don’t get to pay much for the feed-in tariffs and they can either buy their electricity directly on the wholesale market or force their providers to pass on the savings they get from lower wholesale prices because of the renewable energy merit order effect.”

      http://k.lenz.name/LB/?p=7483

      That is true even if many contracts are long-term fixed price for reasons of stability. The merit order effect reduces wholesale prices in the long term. And the amount of reduction goes up with the market share of renewable. Obviously, any long-term contract will take its prices from the market situation at the time of the contract, and if prices are going down in the long term, that will be reflected (possibly with a delay of a year or two until the last reductions get reflected everywhere).

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  3. Thank you for those links.

    I will debunk the Spiegel propaganda in a separate post. I liked reading that article, since it gives me something to write about. Thanks again.

    I will address your other points about merit order later.

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  4. The views in James Conca’s article sum up what most people I know outside Germany think of the decision to shut down the nuclear power plants in 2011.

    People find it quite hard to understand why what happened in Japan led Germany to it’s decision (e.g. no fault line in Germany) and also the massive cost (tens of billions of euros see: http://tinyurl.com/c477kep) and that it led Germany to be dependent on fossil fuel, which have proven long term dangers rather than nuclear where the risk (at least in Germany) is more of a “what if…?”.

    I would say he’s more anti-coal than anti-renewable.

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  5. James Conca and the people you know are free to express their views, though he might want to find some way of expressing them without insulting Germany in his “just plain stupid” headline.

    He is not entitled to make up his own facts. My article above points out just a couple of his falsehoods.

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  6. I’m not trying to be inflammatory, I understand that Germany has replaced (completely?) the capacity of those nuclear plants with renewables now. But it remains that if coal plants were closed instead of nuclear plants, then Germany would now be emitting an awful lot less CO2. Also, since the nuclear plants were shut down on a very short timescale, what type of energy was being used to make up for that? And was the financial cost of the shutdown really justifiable?

    Given impending climate change, and in a time of financial austerity, the decision is difficult to understand. Especially because of the timing, it appears more like a (failed) attempt to woo voters in Baden-Württemberg before the election there than a good-natured effort to promote renewables.

    This is why I think, although the details in Conca’s piece may be incorrect (I don’t like it either), the incredulity of the author is understandable.

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    1. I didn’t read precisely what Conca wrote so I didn’t comment too much on it, but whilst Germany installed a lot of renewable capacity, the plan to replace the nuclear plants with them are not going too well currently.

      Over the first semester of 2012, France’s renewable production is 90% of the one of Germany (source here : https://www.entsoe.eu/db-query/production/monthly-production-for-a-specific-country/ sum of hydro and others).
      But France didn’t install any significant new capacity, it just had a good hydro production and Germany a very bad wind one. What happened with wind in Germany is that the production was half of the of first semester 2011.
      And as a result the absolute record of fossil electricity generation was beaten. Of course it was also an exceptionally bad cold winter, but there’s very little electric heating in Germany, right ?

      Was the bad wind generation just pure bad luck ? Probably, but here’s one thing : As far as I know, none of the plan for integration of a very high percentage of wind power has ever integrated the eventuality of missing such a large percentage of production for that long a period.

      Of course that’s nothing to worry too much about as long as Germany has a back-up plan, lignite with the brand new 2.2 GW (world record probably) plant of BoA near Cologne.

      Greenpeace has been taking a strong position against lignite http://www.greenpeace.de/themen/energie/fossile_energien/artikel/braunkohle_gift_fuers_klima/ but I never saw you very vehement against it, just hopeful things would sort themselves out all right at the end. Well let’s see Germany currently is closing carbon free plants (making the anti-nuclears who wrote the TORCH report rejoice) and opening new lignites one at 800gCO2/KWh (better than the older lignite plant, but still very, very bad).
      I see no reason to be hopeful in the current run of events.

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