Saturday, December 7, 2024

Energy

Home Policy Spotlight Energy

Decommissioning Solar & Wind Projects: A Costly Endeavour

Over the last decade, decommissioning and waste management of solar and wind energy projects has grown into a thriving industry. In the decades to come, with the continued deployment of projects all over the world, it will massively expand.

Solar and wind projects require highly specialised recycling and waste management processes. Decommissioning large plants can run up costs of millions, or even billions.

Solar

As solar capacity expands, demand for decommissioning services will increase. International Renewable Energy Agency estimates that global solar project waste will reach 212 million tonnes a year by 2050. 

Despite photovoltaic projects supposedly lasting 20 years, owners often decommission early. Reasons include broken panels, manufacturers out of business, outdated technical attributes and unprofitable projects. 

The Global Energy Monitor estimates China will pass this five years ahead of schedule.

Solar systems require highly specialised waste management. To reduce landfill waste and promote sustainability, responsible disposal and recycling practices are crucial.

Environmental concerns regarding solar waste components include gallium arsenide, tellurium, crystalline silicon, lead, chromium, cadmium, sulfuric acid, mercury, radioactive materials and heavy earth minerals. Inadequate disposal leads to chemicals leaching into groundwater, stressing nature and agriculture and poisoning drinking water. 

Solar panels also contain valuable raw materials such as copper, steel, aluminium, zinc, and silver. These are wasted in landfill.

Wind 

Waste management of wind turbine blades is also complicated, expensive and raises environmental concerns.

Each blade is 50 to 90 metres long. It must be cut up using specialised equipment. Blades consist of resin and fibreglass, which cannot be recycled or crushed. Existing landfills do not have space for them and setting up new landfills is expensive.

To understand the scope of the issues, let’s take a look at the two largest economies, the US and China. 

US 

Solar 

Commenting on a report by the Energy Information Administration, Solarcycle CEO Suvi Sharma said, “Solar is becoming the dominant form of power generation, but with that comes a new set of challenges and opportunities. We have not done anything yet on making [solar] circular and dealing with end-of-life [panels].”

There are approximately 500 million solar panels installed across the US, increasing 20% each year. Ninety percent of decommissioned panels currently go to landfill due to recycling costs. From 2030 to 2060, the US will accumulate 9.8 million tonnes of solar panel waste, according to a 2019 study published in Renewable Energy.

Sharma stated that, “We see that gap closing over the next five to 10 years significantly, through a combination of recycling becoming more cost-effective and landfill costs only increasing.” 

Time will tell whether or not this prediction is accurate. 

Solar and wind projects require highly specialised recycling and waste management processes.

Wind

The lifespan of a wind turbine is purportedly 20 years. However, as Julie Angulo, senior vice president of Veolia stated “We are seeing a wave of blades that are 10 to 12 years old, we know that number is going to go up.”

Decommissioned wind turbine blades have joined solar panels in landfills, and are known as ‘forever waste’.

According to a 2021 study released by the National Renewable Energy Laboratory, the US will decommission 3,000 to 9,000 blades every year until 2026, 10,000 to 20,000 blades a year until 2040, and 235,000 blades a year by 2050. 

China 

China leads the world in wind and solar energy equipment manufacture. China’s initial aim was 1,200 gigawatts of wind and solar by 2030. The Global Energy Monitor estimates China will pass this five years ahead of schedule.

Waste volumes will rise as projects are decommissioned and replaced, emphasising the need for recycling measures. China currently doesn’t have specific regulations or processes for solar panel and wind turbine waste management. The State has announced it is working on industrial standards and rules to address this.

The state planning agency advised that China aims to have a “basically mature” full-process recycling system for wind turbines and solar panels by the end of the decade. 

Solar 

China is the world’s leading solar market. It has surpassed everyone in terms of expenditure, manufactured panels and energy production.

The International Renewable Energy Agency reported that in 2023, China dominated global solar panel additions with a record-breaking year, adding an estimated 180 to 230 gigawatts. 

However, in June last year China’s official Science and Technology Daily newspaper advised that in spite of the lifespan of 20 years, many of China’s solar projects show significant wear. The paper cited experts saying that China will have 1.5 million metric tonnes of decommissioned panels by 2030. This rises to 20 million tonnes by 2050 and is also in line with The International Renewable Energy Agency’s estimations. China will have the greatest amount of solar panel waste in the world.

Conclusion

The burgeoning solar and wind energy sectors demand attention to the economic implications of decommissioning and waste management. We need to face the fact that “sustainable” energy might not be so sustainable, and fossil fuels alongside nuclear are still necessary to keep costs and environmental damage to a minimum.

Wind Power Industry is a Scam

Is the business concept viable? 

To comprehend the vast folly of the wind power industry, we can ask one logical question: Is the business concept viable? 

Assessing business viability necessitates a comprehensive review of financial projections, operational feasibility, profitability and return on investment (ROI). 

Financial analysis demands meticulous examination of startup costs and operational expenses, versus revenue. 

Operational feasibility assesses practical aspects, evaluating the availability of resources and skilled personnel. 

And profitability and ROI requires the business to generate revenue in a manner that justifies investment. 

Successful businesses meticulously align these factors to achieve sustained success in the free market.

Keep this information in mind as we look at business cases from the wind power industry over the past year.

Financial Trouble 

Markbygden Ett:
The owners of the Markbygden Ett sub-project, part of Europe’s largest onshore wind complex, are undergoing financial restructuring in the Umeå district court, northern Sweden. Facing bankruptcy, the company’s financial struggles stem from an unprofitable 19-year Power Purchase Agreement (PPA) signed with Hydro in 2017. The fixed-volume PPA obliges the company to buy power on the spot market during insufficient wind production, incurring costs due to intermittency. Spot prices rise when wind power is low, contributing to substantial losses. 

This exit cost the Danish company $2.2-2.6 billion in penalties.

Siemens Energy AG: 
Siemens Energy AG is facing a substantial downturn, its share price having dropped nearly 70% since June. This is mainly attributed to issues within its wind turbine subsidiary, Siemens Gamesa. The company projects a €4.5bn loss for the year due to quality problems and offshore ramp-up challenges. Additionally, technical faults in onshore turbine models are expected to cost around €1.6bn to rectify. Siemens Gamesa’s CEO highlighted concerns including rotor blade wrinkles and bearing particles, posing risks to critical components. Siemens Energy aimed to address these issues, but struggled to secure guarantees for its order book. This contributed to a €2bn loss in Q3. Germany’s government approved a €15 billion financial package, including €7.5 billion in loan guarantees, to support Siemens Energy in delivering Germany’s renewable projects. However, the company’s challenges persist.

Cancelled Projects 

Ørsted:
The world’s biggest wind power developer received approval to develop wind power off the New Jersey coast in June this year. It terminated both developments five months later due to soaring costs. This exit cost the Danish company $2.2-2.6 billion in penalties. 

Avangrid:
Avangrid, a member of the Iberdrola Group, is terminating power purchase agreements (PPAs) for the Park City Wind offshore project in Connecticut, citing industry challenges like inflation and supply chain disruptions. This follows their similar move with the Commonwealth Wind project in Massachusetts, resulting in a $48 million penalty. Avangrid plans to rebid both projects. These decisions align with a broader trend of wind project cancellations and challenges nationwide, including requests to government for rate increases above those previously agreed.

Siemens Energy AG is facing a substantial downturn, its share price having dropped nearly 70% since June. 

Fortescue:
Fortescue Metals Group has abandoned its Uaroo Renewable Energy Hub project in Western Australia, once a key part of its green energy strategy. The multi-billion-dollar initiative aimed to build 340 wind turbines and a solar farm, generating up to 5.4 gigawatts. The project’s termination, marked by last month’s approval application withdrawal, signifies a shift in Fortescue’s commitment to achieve carbon neutrality by 2030.

Vattenfall:
Swedish energy giant Vattenfall has halted plans for the Norfolk Boreas wind development, a crucial part of the UK’s green energy goals. The project, intended to power 1.5 million homes, faced a 40% cost increase due to global gas price surges and supply chain challenges. After winning a government contract with a record-low bid, Vattenfall deemed the project unprofitable amid changing market conditions. The decision incurred a £415 million penalty. This is still seen as prudent, considering lack of future profitability. Vattenfall urged the UK government to adapt the financial framework, and the government capitulated, agreeing to increase payments for offshore electricity generation. This intervention raised hopes for the Norfolk Boreas project’s resumption.

Verdict

These examples highlight the vulnerability of wind power development projects. This is particularly evident in offshore projects. 

Wind power does not meet the criteria for a viable business concept.

It Takes Two To Tango

Jim Chalmers

Australia’s centrally planned economy is failing – intergenerational wealth gaps are widening, economic prospects are waning, and the side effects from the Reserve Bank’s (RBA) medicine are becoming worse than the disease. 

Inflation is a scourge, insidiously stealing wealth from those least able to protect themselves, and it benefits the least needy. 

We hear all sorts of explanations as to why inflation is not the government’s fault: the RBA was too loose with monetary policy, AHPRA failed to regulate bank lending standards effectively; hell, even consumers themselves were blamed by former Governor Phillip Lowe.  

But Lowe is gone now and the RBA board under Chalmer’s new darling, Michele Bullock, has continued to hike rates with a 25 basis point increase last week. It’s high time the government understood that fighting inflation is going to require some sacrifice of its own. As Dimitri Burshtein explained, more tax doesn’t make for better government; likewise, more government spending doesn’t curb inflation.   

Dumb and Dumber

The RBA effectively only has one instrument to fight inflation – and that is to increase the cash rate, the thinking being that if borrowing becomes more expensive then demand will be sapped from the wider economy. Australia is a land of high household debt, and it’s largely mortgage holders who feel the pinch when rates rise.

Australia desperately needs synergy between the government and RBA on inflation

What is truly disappointing about the current economic climate is the complete lack of synergy among our central planners – and their approach to the drivers of inflation. The Government seeks to relieve cost of living pressures with subsidies, welfare and spending, while the RBA is slamming the brakes on. We also cannot hope to tame inflation if infrastructure spending remains at record highs and the bureaucracy continues to grow (Georgia shows what must be done).      

Where credit is due

The ‘lender class’ are older Australians who have paid off their homes and are now seeking better returns on their investments – a higher cash rate delivers them higher returns (albeit reduced in real terms by inflation). Meanwhile, mortgage holders only see their costs rise as rates climb, squeezing their already tightening budgets. Downstream from this, renters are slugged as their landlords pass on higher mortgage repayments amidst low rental stock.  

The ‘lendee class’ is getting smashed on two fronts – inflation on the cost of goods and services, while the RBA’s rate hikes squeeze them even more. 

There has to be a better way.

Government to the rescue

The Federal Government needs to take three key steps to reduce the impact of inflation on the ‘lendee class’.  

  • Reduce or remove excise tax on fuel, alcohol and tobacco   

Measures that decrease the cost of items are needed, not inflationary welfare that only continues to drive demand. Fuel excise is particularly important due to its impact on the transportation costs of goods. Meanwhile alcohol and tobacco excise disproportionately affect lower income earners. 

  • Reduce GST, or expand the criteria for exempt items

The Goods and Services Tax disproportionately affects lower income workers as the tax applies as a flat rate on all eligible items, many of which are essential. This will impact state government revenue but with many household budgets at breaking point, they too will have to learn to live within their means.

Inflation is a scourge, insidiously stealing wealth from those least able to protect themselves

  • Sensible energy policy

A thriving economy needs cheap and abundant energy, with energy being a key input across the supply chain, not to mention household budgets. Australia must abandon its 2050 net-zero and 2030 emissions reduction targets. We should welcome investment in coal fired power and natural gas, which we have in abundance. Longer term we must embrace nuclear power. 

Not only would these policies provide genuine relief for those suffering the most from inflation, but they would actually reduce the costs of production and business, helping the RBA rein in inflation. 

Australia desperately needs synergy between the government and RBA on inflation, and the attempts of Chalmers and co to direct public scorn onto the central bank in order to save face are a great shame. If Australian households are expected to do it tough for a while, it’s high time our government accepted the same responsibility. After all, it takes two to tango.  

Anti-Nuclear Policy Is A Tax On The Poor

Some Facts

In 2022, the Brotherhood of St Laurence released “Power pain: An Investigation of Energy Stress in Australia”. It found:

  •  2006 to 2020: Approximately 20% of Australian households experienced energy stress.
  • Energy stress is much higher in specific groups such as people with a chronic health issue or disability, renters, low-income workers and people on unemployment benefits
  • In the lowest 20% income group, energy stress increased up to 8 percentage points, from 40% in 2008 to 48%, in 2017.

A study by the OECD in 2019 titled “Under Pressure: The Squeezed Middle Class”, found:

  • 40% of Australia’s middle class are at financial risk.
  • Australia’s proportion of lower and poor households is higher than OECD average.

Day-ahead energy prices set records in Germany. Between June and August, next-year electricity rates doubled.

Australian energy prices have increased frequently over the past few years, outpacing inflation since the mid-2000s. Despite that, the middle class fears nuclear energy more than becoming poor. This apprehension is misplaced.

Due to uranium’s phenomenal energy density, nuclear energy provides unrivalled price affordability. A ton of coal is required to produce an equal amount of power to a gummy-bear-sized pellet of uranium.

Nuclear has the potential to alleviate financial burdens on the poor and struggling. Decreases in energy prices lead to lower prices on all goods and services.


Germany – A Cautionary Tale

In 2022, Germany’s government doubled-down on higher targets for the country’s Renewable Energy Act (EEG).

Renewable electricity generation in Germany increased by ~9% in 2022 compared to the previous year, reaching 256 terawatt hours (TWh), short of the 269 TWh target set by EEG.

Germany’s goal is 80% electricity from renewables by 2030. This requires an annual volume of approximately 600 TWh. To achieve this, they will need to double green electricity generation in eight years.

In 2022, this aspiration crashed headlong into the German energy crisis, a result of low output from wind and hydro and closing down nuclear power stations. Germany also bore consequences of sanctions levelled by both sides of the Russia-Ukraine conflict. 

Record-breaking increases in energy prices drove inflation across Europe. Day-ahead energy prices set records in Germany. Between June and August, next-year electricity rates doubled.

Originally aiming to phase out coal by 2030, the country’s energy crisis urgently necessitated ramping up coal power generation. Previously closed coal plants were brought back online. Shutdown of lignite and hard coal power plants was postponed until March 2024.

German power output still lagged.

While the energy crisis rolled on, Germany closed its last three nuclear plants in April 2023. Germany’s nuclear era spanned 6 decades, without incident.

From 2023 onwards, Germany is expected to be a net importer of electricity from France, due to Germany’s increased reliance on renewable energy and France’s improved nuclear power availability.


Finland – A Powerful Lesson

Finland has the highest per capita energy consumption in the European Union; double the EU average in 2021. This is attributed to energy-intensive industries, a high standard of living, the cold climate and relatively large territory resulting in long distances travelled.

However, there are no fossil fuels. The energy industry has kept pace with consumption by utilising nuclear power. Nuclear has ensured energy efficiency, reliability and affordability.

A ton of coal is required to produce an equal amount of power to a gummy-bear-sized pellet of uranium.

Finland’s reactors are highly efficient, being some of the most productive on Earth. With an average lifetime capacity factor of over 90%, Finnish reactors have been upgraded significantly since construction. Olkiluoto 1 & 2 have undergone substantial upgrades, with plans to further increase their capacity.

In April 2023, the newest reactor Olkiluoto 3 was brought online. At 1600 megawatts capacity, it is the largest reactor in Europe. This single reactor produces 15% of Finland’s electricity. The three reactors at Olkiluoto now produce approximately 30% of Finland’s electricity.

Olkiluoto 3. This single reactor produces 15% of Finland’s electricity.

When Olkiluoto 3 came online, Finland’s electricity prices immediately fell by a staggering 75%. Jukka Ruusunen, CEO of Finnish grid operator Fingrid, said “We have more stability in the system because of Olkiluoto 3. It’s a giant nuclear reactor, one of the largest on earth, connected to a small system (Finland’s power grid).”


Australia

Interest in nuclear energy is fast-gaining political support in Australia. The Liberal Democrats / Libertarian Party and the Coalition have voiced support for an immediate repeal of Australia’s outdated moratorium on nuclear energy.

The World Nuclear Association stated “Australia has a significant infrastructure to support any future nuclear power program.”

Olympic Dam, South Australia

Australia has the most uranium of any country, totaling 28% of the earth’s ore. Olympic Dam in South Australia is the largest known single deposit of uranium in the world.


Conclusion

When unencumbered by government and its meddling red tape, the free market will determine the energy source which is safest, most reliable and can be readily provided at the lowest price. In May 2023, across the globe, there were 410 operable nuclear power reactors, 59 reactors under construction, 100 reactors planned and 325 reactors proposed. It is time for the Australian market to embrace nuclear energy.

SENATE LIVE: Nuclear energy debate from the Senate floor now …

ffd
Senator Ralph Babet (UAP, Vic) in full flight on Senate floor

LIVE DEBATE

Live now from the Senate floor, Senator Ralph Babet (UAP, Vic) raises ‘matter of interest’ … removal of Australia’s prohibition on nuclear electricity generation.

The Senator in full flight. An historic speech. Watch live now …

https://www.aph.gov.au/News_and_Events/LiveMediaPlayer?vID=%7B5BBCDCF5-4A0C-4A05-86CF-EE872069FBD9%7D&type=1


HISTORY

Nuclear energy prohibition started to emerge as a possibility in the old Hawke, Nuclear Disarmament Party days in the 1980s.

However, the nuclear energy prohibition actually came into being on 10 December 1999. The Howard Coalition Government was seeking to have a new nuclear research reactor built at Lucas Heights, Sydney. Labor was opposed so the Liberals and Nationals turned to the Australian Greens for support. The Greens said ‘yes’ if the the Government would support a prohibition on nuclear electricity production. In the absence of any nuclear power plants being constructed, the Howard Government agreed, Lucas Heights was built and the general ban instituted.

The debate in the Senate lasted 10 minutes!

On 28 September 2022, Senator Canavan (LNP, Qld) delivered a second reading speech for Environment and Other Legislation Amendment (Removing Nuclear Energy Prohibitions) Bill 2022 calling for the nuclear energy prohibition to be lifted. This amendment was not carried.

Senator Babet continues the fight.


SENATE PROCEDURE

Time for “Matters of Interest” speeches are allocated proportionally to political parties on the basis of the seats held.

The United Australia Party has one senator of seventy-six, or 2% of the time available. As the sole senator for his party, Senator Babet receives all of that time.

It is worth noting therefore that senators of the majors only receive “Matters of Interest” time at the whim of their party leadership. Liberty Itch imagines this adversely affects Senator Matthew Canavan (LNP, Qld), Senator Gerard Rennick (LNP, Qld) and Senator Alex Antic (Liberal, SA).