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Showing posts from January, 2015

Polish Deal on Coal Mines: Reality Challenged

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Okay, to be politically correct, you might not be able to say it is a completely phony political move designed only to placate voters in the mining region for the next two years or so. So let's say it is simply reality challenged.

A good summary in Polish of the problems with the deal is here.

There is an excellent chance that much or all of the government help postulated will be illegal state aid, i.e. the EU only allows state aid to liquidate coal mines, not to sustain them. See European COUNCIL DECISION of 10 December 2010 on State aid to facilitate the closure of uncompetitive coal mines (2010/787/EU). Pretty strong stuff: "The Union’s policy of encouraging renewable energy sources and a sustainable and safe low-carbon economy does not justify the indefinite support for uncompetitive coal mines." Id. Support is only authorized for "measures to alleviate the
social and regional consequences of the closure of those mines, that is to say [their]... orderly winding…

When the investors leave.......

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The reality of modern economics is an inescapable condition in which public policy finds itself. The delusions of central government economic planning via command and control have been proven to be fatally flawed by history. In the end, people commit to the things that work and are economically sustainable based upon their own individual decisions or those of their private organization. Their mistakes are seen by others and new decisions made that better reflect the economics and technical reality on the ground.

When investors decline to participate in an activity, it is generally not profitable enough to be sustainable. At the same time, the risks may be much greater than the potential rewards, so the money stays home or goes somewhere else.

This is largely the story of Polish energy at this point. The only folks who want to pursuit a nuclear plant investment in the land of the highest red tape in the EU are the government-owned entities who have no actual choice in the matter.  Priv…

Another Report Indicates that Distributed Energy is the Wave of the Future

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"Overall, experts say that the basic funding mechanism for utilities needs to change so they have financial incentives to enable adoption of new technologies and encourage customer energy efficiency. Many changes along those lines could be a tough sell in the utility industry, which is famously conservative. But they may not have a choice. “Distributed generation is something that couldn’t be stopped even if we wanted to,..." [MIT report 2014]