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Germany’s Unaffordable Wind Power ($0.07/kWh surcharge for $0.20/kWh power, anyone?)

By Donald Hertzmark -- February 21, 2013

[Update: Germany Stops Fighting Arithmetic and Ramps Up Construction of Economically Sensible Power Generation]

Two years ago we looked at the claim that wind generation can save money for power pool customers.  We found that the supposed savings could be realized only if the elephant in the room – the above-market feed-in tariffs – were ignored.

In other words, the total amount spent on electricity purchases from a power pool was augmented by the additional amounts consumers pay to fund the feed-in-tariff (FIT).  As long as wind generators can bid a low price but receive the higher FIT, then they have an incentive to underbid, thereby reducing pool prices, but not overall costs.

In addition, we looked at what an economically least cost system might look like in Germany over the next ten years. …

America's Bounty vs. Federal Frac Rules: Will We Lead or Lag the World?

By Donald Hertzmark -- June 29, 2012

Articles on this blog have consistently made the point that shale gas in the U.S. represents an unprecedented pathway to abundant, low-cost, clean energy supplies. In previous posts it was noted that unconventional gas resources, combined with new production technologies, could potentially break the global oil-natural gas price bond, just as has happened in the U.S.

Shale gas is now subject to active exploration in England, Australia, Poland, Ukraine, China, India, and to a lesser extent, South America. Canada has already moved to the development stage with its shale formations in British Columbia (Montney and Horn River). Mexico shares the prolific Eagle Ford shale formation with Texas, but its state-owned PEMEX has done little to develop that resource yet.

Other nations have rejected the gift of unconventional gas. Romania and Bulgaria, both heavily dependent on Russian gas, have said “no” to shale gas production, as has France.…

Energy Subsidies vs. Energy Sense: What Have We Learned in the Past 3 Years?

By Donald Hertzmark -- November 18, 2011

The U.S. Department of Energy publishes periodic reports (see the latest) on federal government subsidies to energy production in the U.S.  These reports total up the costs of direct financial support for various energy technologies, tax incentives, research related to marketing and implementation and price support.

Federal support for energy in FY 2010 alone includes the following activities:

Direct Expenditures to Producers or Consumers – $14.3 billion. Federal programs involving direct cash outlays that provide a financial benefit to producers or consumers of energy.

Tax Expenditures – $16.3 billion. Provisions in the federal tax code that reduce the tax liability of firms or individuals who take specified actions that affect energy production, consumption, or conservation.

Research and Development (R&D) – $4.4 billion. Federal expenditures aimed at a variety of goals, such as increasing U.S.…

Call for Energy Price Controls: Has the 1970s Experience Been Forgotten? (hidden perils of a $3.50/gallon federal price cap)

By Donald Hertzmark -- October 3, 2011

Unconventional Gas Riles and Refigures the World Energy Market: The Oil Market (Part III)

By Donald Hertzmark -- February 24, 2011

Unconventional Gas Riles and Refigures the World Energy Market: The Pacific and Asia (Part II)

By Donald Hertzmark -- February 17, 2011

Unconventional Gas Riles and Refigures the World Energy Market: North America (Part I)

By Donald Hertzmark -- February 16, 2011

Energy and Poverty – What is Really at Stake in Cancun

By Donald Hertzmark -- December 6, 2010

German Wind Capacity Revisited: High Cost versus Least Cost

By Donald Hertzmark -- September 7, 2010

Germany: Wind and the Power Pool Savings Myth

By Donald Hertzmark -- September 3, 2010