Can Switzerland export its amazing success story?

byJohn Brian Shannon (This article first appeared at JohnBrianShannon.com)

Subalpine lake in Switzerland
Sub-alpine lake in Switzerland

Let’s look at Switzerland today, a tiny nation of 8 million people. Historically a neutral country, Switzerland isn’t a member of the EU, nor of NATO, but it is a member of the EU’s common security and defence policy (CSDP) and it became a member of the UN on September 10, 2002.

Some other notable facts about Switzerland are that it is ruled by direct democracy where citizens can block any law or get a new proposal heard and voted on with only 50,000 signatures, and the country has proximity to the largest market in the world, the European Union.

It is also one of the most beautiful places on the planet.

Switzerland makes the best of its opportunities

Switzerland ranks in the top 5 places to live in the world, personal income ranks in the top 5 in the world, it ranks in the top 5 education systems and in the top 5 health care systems in the world. In many other measures Switzerland ranks among the top 10 globally.

How did little Switzerland with only 8 million people, few resources, and buried under a blanket of cold and snow for 6 months of the year, manage all of that and so much more?

As is often the case, the answer is good management!

  • With less than 2% of the world’s population Switzerland has attained 19th place (nominal GDP) and 36th place (PPP) out of 191 countries
  • It boasts one of the highest per capita incomes in the world at $137,094 median (PPP)
  • The country has the highest average wealth per adult in the world, at $540,000 (PPP)
  • Switzerland has low unemployment rates at 3.2% (2014 and 2013) and 2.9% (2012)
  • The Federal government not only runs a balanced budget, it often runs a tidy budget surplus
  • The public debt-to-GDP is a low 46.7% (2012)
  • Inflation ranged between .7% and .2% over the last 5 years
  • It is one of the world’s most stable economies
  • Noted as one of the most politically stable nations in the world
  • All the major credit rating agencies give Switzerland a AAA credit rating
  • Switzerland is the world’s 20th largest exporter at $308.3 billion dollars (CIA Factbook)
  • The Global Competitiveness Report by the World Economic Forum ranks Switzerland’s economy as the world’s most competitive
Labour productivity Europe 2012
Productivity in Europe 2012

Image by Monsieur Fou (Own work) [CC-BY-SA-3.0] via Wikimedia Commons

What time is it? It’s always Swiss Time.

Rolex.com
Rolex.com The world’s finest Swiss timepieces

Historically covered by a thick blanket of snow for six or more months of the year, the Swiss had plenty of time on their hands. So they decided long ago to make some ultra-high quality clocks to mark time until the return of spring.

The Swiss clock and wristwatch industry exported $20 billion dollars worth of timepieces in 2011, making the Swiss #1 exporters of timepieces in the world. Exports of watches and clocks from Switzerland have been ticking upwards, some years showing a 14% increase compared to the previous year.

If you’d like to buy a piece of art that also displays time, you’ll recall these Swiss brand names; Rolex, TAG-Heuer, Hublot, Zenith, Swatch and International.

Switzerland, where the world’s banks do their banking

Owing to long-standing Swiss neutrality and the careful management of Swiss national sovereignty, a stable environment for the banking sector evolved which was observed by many foreign nations and their central banks, hence most of the worlds central banks maintain offices and conduct business there.

The financial sector in Switzerland contributes approximately 12% of Switzerland’s GDP and employs 200,000 people. It is known internationally as the world’s banking capital and all banks cooperate with the Bank of International Settlements, based in Basel, Switzerland. The country’s banks processed a grand total of 5.4 trillion Swiss francs in 2009.

On top of that, foreign banks operating in the country manage almost another 1 trillion Swiss francs worth of assets per year.

Nothing but fresh air in all directions

Switzerland is #1 (2014) and #2 (2013) in the world when it comes to creating a progressively cleaner environment. And not only visionary policy, but tangible results too! As the Swiss work to cut total energy consumption levels in half by 2050, they are using cleaner fuels, more renewable energy, and in 2011 decided to begin the process of decommissioning all of their nuclear and coal power plants, a process which will be completed by 2045. (OECD Swiss environmental link here)

Lucerne, Switzerland

Lucerne and Lucerne Lake, Switzerland. Image by Clare66 (Own work) [CC-BY-SA-3.0] via Wikimedia Commons

Simple, but effective changes have showed promising results. The large amount of household waste set out for curbside collection was tackled via pre-paid stickers that must be placed on each bag to be picked up at the curb. This has dramatically reduced the amount of waste that must be processed.

A large number of complementary projects are underway in the country, which range from sustainable forestry practices (forests cover 31% of the country), to even more world-class transit systems (the spectacular views are complimentary), to the 2,000-Watt Society which aims to lower carbon footprints by cutting total energy consumption levels in half by 2050.

The 2000-watt society (2,000-Watt Society) is an environmental vision, first introduced in 1998 by the Swiss Federal Institute of Technology in Zürich, which pictures the average First World citizen reducing their overall average continuous energy usage to no more than 2,000 watts (48 kilowatt-hours per day) by the year 2050 – without lowering their standard of living.

The concept addresses not only personal or household energy use, but the total for the whole society, divided by the population.

Two thousand watts is approximately the current world average rate of total energy use. This compares to averages of around 6,000 watts in western Europe, 12,000 watts in the United States, 1,500 watts in China, 1,000 watts in India, 500 watts in South Africa and only 300 watts in Bangladesh. Switzerland itself, currently using an average of around 5,000 watts, was last a 2000-watt society in the 1960s.

It is further envisaged that the use of carbon based fuels would be ultimately cut to no more than 500 watts per person within 50 to 100 years.

The vision was developed in response to concerns about climate change, energy security and energy supplies. It’s supported by the Swiss Federal Office of Energy, the Association of Swiss Architects and Engineers, and other bodies. — Wikipedia

Swiss Army Knife stats

The UN DESA list says Swiss citizens have the second-highest life expectancy in the world. Switzerland is also ranked #1 (tied) on the Bribe Payers Index indicating very low levels of business corruption. For the last five years the country has been ranked #1 in economic and tourist competitiveness according to the Global Competitiveness Report and the Travel and Tourism Competitiveness Report respectively, both developed by the World Economic Forum.

Zürich and Geneva have been ranked among the top cities with the highest quality of life in the world. Switzerland has very low tax rates as compared to other western nations. More Swiss citizens have won Nobel Prizes, than any other single country’s citizens.

Flag of the Red Cross
The monochromatically reversed Swiss flag became the symbol of the Red Cross Movement, founded in 1863 by Henri Dunant.

The Red Cross and Red Crescent, the United Nations (the UN Palace of Nations is the 2nd-largest UN facility in the world), the World Health Organization (WHO), the International Labour Organization (ILO), the International Telecommunication Union (ITU), the United Nations High Commissioner for Refugees (UNHCR) and about 200 other international organisations, including the World Trade Organization and the World Economic Forum in Davos all have their headquarters in Switzerland.

Furthermore, many sport federations and organisations are located throughout the country, such as the International Basketball Federation in Geneva, the Union of European Football Associations (UEFA) in Nyon, the International Federation of Association Football (FIFA) and the International Ice Hockey Federation both in Zürich, the International Cycling Union in Aigle, and the International Olympic Committee in Lausanne.

There is a world-class scientific community that also thrives within the country, some of it centred around the CERN particle accelerator (the largest such device in the world) which is what recently confirmed the presence of the (up-till-then-theoretical) Higgs Bosun. Also, the World Wide Web began as a CERN project called ENQUIRE, initiated by Tim Berners-Lee in 1989.

The largest Swiss companies by revenue are Glencore, Gunvor, Nestlé, Novartis, Hoffmann-La Roche, ABB, Mercuria Energy Group and Adecco.

Also, notable are UBS AG, Zurich Financial Services, Credit Suisse, Barry Callebaut, Swiss Re, Tetra Pak, The Swatch Group and Swiss International Airlines. Switzerland is ranked as having one of the most powerful economies in the world.– Wikipedia

Healthcare in Switzerland

All Swiss citizens are required by law to carry private health insurance and the healthcare insurance companies are required to accept every citizen-applicant. It is an expensive system, but with high wages and even high-minimum-wages in Switzerland it is an affordable system for the Swiss. As noted above, citizens enjoy the 2nd highest life expectancy in the world and even that statistic continues to improve.

The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries has ranked Switzerland #2 in the world for overall healthcare outcomes.

The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries
The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries

Swiss President about town

To give you the best idea of how relaxed and civilized Switzerland is, the President of Switzerland, Mr. Didier Burkhalter, takes the train to work just like other citizens and was photographed recently at the train station waiting for the train.

That’s the way it is in Switzerland. The President of the country goes to the train station to catch the train like everyone else. He stands on the platform waiting for the train and texting on his SmartPhone and nobody there thinks a thing about it… yet in North America this is seen as a novel act and it goes viral on Twitter in only 8 minutes.

Switzerland summary

With only a tiny land mass, no sea access, a small population, minimal natural resources (compared to the U.S.A., Canada, Australia, Brazil or Argentina, for just a few examples) and long winters combined with fragile ecosystems, Switzerland has created a thriving and special society inside a very pure form of democracy — from little else than pure ingenuity. It’s no wonder the Swiss citizens have been awarded more Nobel Prizes than any other nation!

This doesn’t cover half of Switzerland’s achievements and all of this and much more is happening on only 15,940 square miles of land, and most of that is covered with Swiss Alps and glaciers.

If Norway can succeed like this, why can’t every nation?

by

Cruise ship navigates northern Norway coastline. Image courtesy of visitnorway com
Cruise ship navigates Norway coastline. Image courtesy of visitnorway.com

Let’s look at Norway, a tiny nation of 5.1 million people. Norway has a medium-sized undersea petroleum reserve, some timber resource and proximity to the largest market in the world. It also once boasted a booming fishing industry, however, with fish stocks in decline only a fraction of that former fishery remains.

On the bright side, Norway has more scenic views per kilometre than anywhere on the planet.

But other than that, the long and narrow, mostly empty country that exists along the North Sea spends most of the year under a blanket of snow, ice, and bitter cold.

Norway makes the best of its opportunities

And yet, Norway has made the most of its opportunities, ranking regularly in the top 5 places to live in the world, personal income ranks in the top 5 in the world, in the top 5 education systems in the world, and in the top 10 health care systems in the world. In many other measures Norway ranks among the top 10 globally.

How did little Norway, with only 5 million people, few resources, and buried under a blanket of cold and snow for 6 months of the year, manage all of that and so much more?

As is so often the case, the answer is found within the question itself. Good management!

Many nations have more generous helpings of natural resources and opportunities available to them compared to tiny Norway, and yet for some strange reason they can’t claim anywhere near Norway’s economic success and resultant quality-of-life for residents.

Norway overcame many obstacles to get where it is today, and chief among them was bad advice!

At Norway’s entry into the petroleum market after discovery of undersea oil and gas reserves in the 1969, the Norwegians were told that oil companies would leave if they weren’t granted exemption from the country’s high taxation, stalling any future development.

The Norwegians were also told that high personal tax rates would cause a flight of capital from the country and that executives and professionals would flee to greener pastures, leaving only a blue collar economy behind which would require Norway to thenceforth hire expensive foreign consultants to conduct the government’s business, high finance and corporate law.

Norway was also warned over-investing in its health care system and education systems could wreck their overall economy.

And the Norwegians were told that their country was too cold, too forbidding, and too isolated to have any kind of serious tourism business.

Well, lets look at how it all turned out, shall we?

  • With less than 1% of the world’s population, Norway’s economy has reached 22nd (nominal) / 46th (PPP) out of 191 countries, according to the CIA Factbook, with an average of 3.5% (2013) growth throughout the economy
  • Norwegian public debt is very low at 30.3% of GDP (2012)
  • Norway’s high productivity score, ranked #15 by the World Economic Forum in 2012 still puzzles economists worldwide
  • The WEF also scored Norway at #3 globally for its macroeconomic environment in 2012
  • Norway’s inflation rate is stable at 2.2% (2013)
  • Unemployment is stable at 3.3% (2013)
  • Norway maintains an AAA credit rating with the financial rating agencies (2012)
  • Norway’s entire economy produced $499.8 billion GDP with 3.1% growth in 2012
  • Out of that $500 billion dollar economy, Norway maintains one of the highest per capita incomes in the world at; 492,000 NOK / $79,104 (2013) (PPP) which places them at (3rd) position in the world
  • Monthly incomes for all employees, including male and female, full time and part time workers in the country rose 3.9% from 2012 to 2013, averaging 41,000 NOK / $6592, per month (2013)
  • Norway donates almost 1% of GDP each year to worthy causes around the world, amounting to slightly over $2 billion dollars of foreign aid annually.
Norway personal income chart 2013
Norway personal income chart 2013

Norway Healthcare

In 2000, healthcare in Norway was ranked by the WHO at 11th position in the world out of 191 countries, but in 2014 was ranked at 7th position by Commonwealth Fund Group in a comprehensive study of the top 11 healthcare systems in the world. See: The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries comparison charts here.

The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries
The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries

Tourism in Norway

The official emblem of the 1994 Winter Olympics in Lillehammer, Norway is a stylized aurora borealis (northern lights) and snow crystals.
The official emblem of the 1994 Winter Olympics in Lillehammer, Norway.

Although the incredibly scenic fjords are unavailable for tourism six months of the year, the picturesque cities dotting Norway’s far-flung fjords welcome thousands of cruise ship travelers all summer and are a vital contributor to the country’s economy. Inland, various scenic driving and hiking tours are available and a surprising number of homeowners advertise bed-and-breakfast accommodations.

Skiing and snowboarding facilities exist country-wide and the Norwegian’s have capitalized on all six months of snow and cold temperatures, bringing a combined tourism industry from almost nil, to a multi-billion dollar level with four decades of dedicated effort.

The Lillehammer Winter Olympics officially known as the XVII Olympic Winter Games were held in Lillehammer, Norway in 1994. Norway’s capital city of Oslo held the 1952 Winter Olympics.

Total tourism revenues at the height of the global financial crisis in 2009 were in the neighbourhood of $6.6 billion dollars (direct and indirect) and $319 million dollars (direct) annually.

Norway’s Oil and Gas industry

Norway extracts 1.92 million barrels per day from its North Sea crude oil reserves and also extracts some 200,000 Million square metresᶟ (oil equivalent) of natural gas.

Petroleum profits are taxed at 78%, which nets Norway significant annual revenue. Even with the highest oil and gas taxation on the planet, Norway has no shortage of oil companies willing to exploit the medium sized offshore reserves.

One of the companies involved in Norway’s oil and gas industry is (67% government-owned) Statoil, Norway’s state oil company. It is the 11th largest petroleum company in the world, reporting gross revenues of $723 billion dollars in 2012.

Norway Petroleum Directorate
Norway Petroleum Directorate. History and forecast for oil and gas extraction graphic in millions of square metresᶟ oil equivalent, per year.

Why does Norway have $700 billion dollars in the bank? And why did it pass legislation to never spend more than 4% of the total in any given year?

While there’s no question that Norway has done well from its oil and gas, unlike many resource-based nations, Norway has invested its petro dollars in such a way as to create and sustain other industries where it is also globally competitive. The second largest export of Norway is supplies for the petroleum industry, points out Ole Anders Lindseth, the director general of the Ministry of Petroleum and Energy in Norway.

“So the oil and gas activities have rendered more than just revenue for the benefit of the future generations, but has also rendered employment, workplaces and highly skilled industries,” Mr. Lindseth says.

Maximizing the resource is also very important. Because the government is highly invested, (oil profits are taxed at 78 per cent, and in 2011 tax revenues were $36-billion), it is as interested as oil companies, which want to maximize their profits, in extracting the maximum amount of hydrocarbons from the reservoirs. This has inspired technological advances such as parallel drilling, Mr. Lindseth says.

“The extraction rate in Norway is around 50 per cent, which is extremely high in the world average.”

In 1990, the precursor of the Government Pension Fund – Global (GPFG), a sovereign wealth fund, was established for surplus oil revenues. Today the GPFG is worth more than $700-billion.

The GPFG wealth fund is largely invested outside Norway by legislation, and the annual maximum withdrawal is 4 per cent. Through these two measures, Norway has avoided hyper-inflation, and has been able to sustain its traditional industries. — The Globe and Mail

Norway fishing and seafood industry

The wild and farmed fishery and non-fish seafood industry in Norway accounts for billions of dollars of economic activity. Exports totaled $7.1 billion dollars in 2009, $3.8 billion of that from aquaculture. In 2011, aquaculture alone had grown to $4.9 billion.

Guided by the Norwegian government, the fishery has grown into a sustainable industry that meets the needs of Norwegian’s and continued growth is expected for fish and other seafood exports.

Summary of ‘the little country that could’

Rather than complain about the cold weather most of the year, Norway took a long look at its assets and location and decided to make the best of it. A telling refrain you will hear in the Nordic countries is, “There is no bad weather, only bad clothing.” That, in a nutshell, is the Nordic mindset.

Indeed, this speaks volumes about who they are as a people. If you want to go out, you dress appropriately. This worldview seems to have assisted the Norwegians to make the most of their opportunities by taking stock of prevailing situations, and responding appropriately.

Norway: Where ‘what matters most’ — actually matters!

Their guiding principles dictate that the well-being of its citizens must be first and foremost in economic decisions, with care being taken to create a sustainable long-term model.

Ergo, a country of 5 million with limited arable land and harsh winter, simply adapted to their environment and their economic environment. Citizens and non-citizen residents are fairly rewarded for their productivity and loyalty to the country, which further engendered productivity and loyalty.

Norway wisely invested in the country’s future so that all Norwegians can receive a full university or vocational education funded by government taxation and receive free healthcare, and many other citizen benefits. Any resident of Norway — whether they’re a Norwegian citizen or not — can apply to Norway’s public universities and receive a full university education free of charge. The idea behind this is that an educated society brings its own economic benefits and increases the dissemination of knowledge to all corners of the Kingdom of Norway.

Likewise, all residents are covered by Norway’s healthcare service, although it can be challenging for the government to provide timely services to tiny population centres of 10-100 people in very remote parts of the country.

Norway proved it can be done

Putting the needs of citizens first, guaranteeing the safety and security of residents, environmentally-sound development of natural resources and sustainable long-term economic models have placed Norway near the top in all global indicators — and that is in spite of the negatives the country must contend with.

Results matter. Ideology does not

Norway is a model that every country must research carefully to contrast and compare with their own results. Which is what really matters. Results matter. Ideology does not matter.

Let’s hear it for pragmatism!

What matters to Norwegians is the well-being of residents and the strength of the economy, and what matters to the Norwegian government are the ratings of respected indices such as those from the UN, the World Health Organization (WHO), the World Economic Forum (WEF), credit rating agencies and others.

Norway should award itself a Nobel Peace Prize for Excellence in Governance and Society.

Nobel Peace Prize medallion
And, the next Nobel Peace Prize should go to… Norway, for Excellence in Governance and Society.

 

 

 

 

 

 

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U.S. Production Tax Credit renewal charts Wind future

by John Brian Shannon

It boils down to this. If the U.S. Production Tax Credit (PTC) is renewed by the U.S. Congress this fall, then wind power is set to boom for the next five years.

If it isn’t renewed, we can expect a few more years like 2013 where due to the uncertainty surrounding the annual PTC expiry/renewal many projects in the U.S. were shelved, resulting in a dismal 1GW of wind installations across the U.S.A. that year.

Without the PTC renewal, 2015-2020 are likely to post similar results in the U.S. for new wind installations — at a time the rest of the world is setting yearly wind power generation and installation records.

European and Chinese wind turbine manufacturers are anticipating the decision as much of their future business could flow from the United States which has huge, untapped wind reserves, both onshore and offshore.

Fossil Fuel economic subsidies

Unlike the massive subsidies and tax breaks for the fossil fuel industries, which literally go up in smoke requiring constant subsidy dollars to continue along their present business model, wind production tax credits are not spent to lower rising fuel costs. Rather, the tax favour allows more wind turbines to be built and installed, resulting in fewer fossil fuel subsidy dollars going up in smoke.

Worldwide, the fossil fuel industry receives over $550 billion dollars of subsidy and tax breaks — and the U.S. alone gives $80 billion to their domestic oil, gas, and coal industries to lower fuel costs for consumers. That’s 1/7th of the world’s total fossil fuel subsidies, right there.

Fossil Fuel externality subsidies

That doesn’t include the implied subsidy of externalities, those costs to society from fossil fuel use that are not factored into the fuel cost and are not paid for by the oil and gas, or coal industries. Everything from the acid rain that eats concrete structures like bridges, skyscrapers, some roadways and concrete sculptures, to polluted water that must be treated before it can be used, to building filtration systems to remove airborne pollutants caused by fossil fuel burning, to medical costs borne by individuals, organizations and governments, and more. The final fossil fuel externality is, of course, the millions of premature deaths worldwide caused by the ever-increasing concentrations of fossil emissions in our atmosphere.

Fossil Fuel externality cost estimated at between $40-80 per ton of CO2

The cost of fossil fuel use is estimated to be on the order of $40-80 per ton of CO2 emitted and those costs are paid, just not at the gas pump. Governments and individuals pay that price — which varies widely depending upon where you live (city, country, downwind of coal power plants, or on the coastline with its usually fresh air).

If we included the externality cost of all fossil fuels, every type of fuel would double in cost. Our coal-fired electricity would double in cost, and removing the direct subsidies would double it again. The same would occur with gasoline and diesel for our cars.

Yes, it’s a lot of money. And one way or another, we’re paying it. Don’t deceive yourself, it is being paid, just not at the gas pump nor on your electricity bill. But we are paying those subsidies and externality costs in our taxes, and in other ways such as higher health costs and lowered life expectancy resulting from our fossil fuel addiction.

Wind PTC subsidy amounts to a paltry 2.3 cents/kWh (if renewed)

None of those externalities exist for wind power. Wind has no $40-80 per ton of CO2 externality. Wind is not asking for worldwide subsidies of $550 billion, nor is it asking for American subsidies of $80 billion dollars.

Wind power in the U.S.A. is asking for a paltry 2.3 cents/kWh over a 10 year period.

The current amount of the PTC is an inflation-adjusted 2.3 cents/kWh for ten years. For use in our levelized cost analysis, we levelized its value over twenty years, the average duration of a wind energy contract. — Visualizing the Production Tax Credit for Wind Energy, Syracuse University / University of California, Irvine / University of California, Berkeley

Here is an infographic that shows some of the ways that wind power assists the U.S. economy, which was provided to us by the American Wind Energy Association (AWEA).

AWEA_Wind_Gaphic_R5
American Wind Energy Association Graphic (R5)

Wind Power jobs

As the graphic demonstrates there are many tangible benefits of wind power in the United States, not the least of which is providing jobs for Americans, attracting billions of dollars of investment, and adding new, clean electrical generation capacity to the utility grid.

Wind turbines, an additional income source for farmers

Many farmers augment their annual income by inviting utility companies to install wind turbines on their farms. While most crops produce between $150-600 per acre of land after costs are deducted, a utility company wind turbine pad rental with 24/7 access, pays approximately $4000 per acre of land, although this varies in different parts of the country. The extreme range for wind turbine installation payments appears to be $2200-6500 per acre, depending on regional wind flows and size and height of the turbine. Unfortunately for farmers, wind turbines and their towers are quite large, limiting installations to a maximum of one turbine per every few acres, depending on the size of the unit.

Windpark-Wind-Farm
By Philip May (Own work) CC-BY-SA-3.0 via Wikimedia Commons

GE Space Frame Tower

General Electric too, is awaiting the decision and has an entirely new product line ready to deploy, both in turbines with their Brilliant wind turbine technology and their truck-transportable and easily-assembled Space Frame Towers.

GE Space Frame Tower
Introduced in 2014, GE’s five-legged Space Frame Tower is covered by a plastic fabric. Image courtesy of GE.

Be sure to check out another graphic AWEA made earlier this month highlighting some of wind’s many other benefits by clicking here: http://bit.ly/1qtwHBc.

Help us spread the good news about wind power’s good deal by sharing this graphic with friends and colleagues.

Here are a few suggested tweets:

Wind Power breaks records across Europe

Wind Power smashes records across Europe

Britain’s fleet of onshore and offshore wind turbines met 22% of electricity demand on Sunday, setting a new record and outperforming coal, which met just 13% of demand.

Wind Turbines UK Image courtesy of ReNews
Wind Turbines UK Image courtesy of ReNews

Across the Channel, Spain has reported high levels of summer clean energy output with over 55% of electricity generation coming from zero emission sources during July. And Germany has announced that it generated more than a third of its energy from renewable sources in the first half of this year, while energy from fossil fuel plants – gas and coal – declined.

“Wind has become an absolutely fundamental component in this country’s energy mix,” RenewableUK Director of External Affairs Jennifer Webber said today in an e-mailed statement. “Wind is a dependable and reliable source of power in every month of year including high summer.” — Bloomberg

These figures are the latest clear signals that renewables are increasingly stealing the limelight from outdated fossil fuels. Earlier this year, onshore wind was revealed as the cheapest form of new electricity generation in Denmark and wind met over half of the country’s power demand last December. Renewable energy is also becoming cost competitive elsewhere with solar power reaching grid parity in Italy, Spain and Germany. This trend clearly indicates to European getting ready to agree a climate and energy framework to 2030 that the transition from fossil fuels to renewables is happening and here to stay. For more on this story click here.

Wind to power 50% of Denmark’s demand by 2020

While other countries debate whether to install wind turbines offshore or in remote areas, Denmark is building them right in its capital. Three windmills were recently inaugurated in a Copenhagen neighbourhood, and the city plans to add another 97.

“We’ve made a very ambitious commitment to make Copenhagen CO2-neutral by 2025,” Frank Jensen, the mayor, says. “But going green isn’t only a good thing. It’s a must.”

The city’s carbon-neutral plan, passed two years ago, will make Copenhagen the world’s first zero-carbon capital. With wind power making up 33% of ­Denmark’s energy supply, the country already features plenty of wind turbines.

Indeed, among the first sights greeting airborne visitors during the descent to Copenhagen’s Kastrup airport is a string of sea-based wind towers. By 2020, the windswept country plans to get 50% of its energy from wind power. — For more on this story visit Newsweek

Siemens receives Norwegian order for 67 wind turbines

Siemens has announced that it has received an order from Norwegian energy utilities Statoil and Statkraft for 67 wind turbines for the Dudgeon Offshore Wind Farm in the UK. The news comes just days after the UK installed their first 6 MW wind turbine at the burgeoning Westermost Rough offshore wind farm in the North Sea. Siemens will manufacture, deliver, install, and commission 67 of its direct-drive 6 MW wind turbines, each of which has a mammoth 154 meter rotor.

“We are proud to convince more and more customers about the advantages of our 6-megawatts-offshore machine”, said Dr. Markus Tacke, CEO of the Wind Power Division of Siemens Energy. “With Dudgeon we extend our project pipeline for this new turbine. This gives us the opportunity to further ramp up production capacity, which is a precondition to bring down the costs for offshore wind.”

The Dudgeon Offshore Wind Farm will begin construction in early 2017, and upon completion is expected to provide electricity to more than 410,000 UK households. For more on this story, head over to CleanTechnica

Vestas reports healthy profits and order for 32 – 8MW Wind Turbines

One of the world’s largest wind energy manufacturers, Vestas Wind, reported healthy second quarter earnings for 2014, and is now waiting on DONG Energy’s final investment in a UK offshore wind project which would require the Vestas 8 MW turbines. Vestas reported a strong turnaround from their second quarter earnings a year previously with a 13% increase to €1.34 billion. The company reported a net profit in the second quarter of €94 million ($125 million), compared to a €62 loss a year earlier

The news came just a day before Vestas confirmed that they had entered into a conditional agreement with DONG Energy for the upcoming Burbo Bank Extension in Liverpool Bay off northwest England. Vestas would provide 32 8 MW V164 turbines for the extension project, and are awaiting DONG Energy’s commitment to the project before the deal is sealed.

“Larger and more cost-efficient wind turbines are key elements in the realization of Dong Energy’s strategy towards reducing the cost of electricity from offshore wind,” said Samuel Leupold, an executive vice president at Dong. “Competition among the offshore wind turbine manufacturers will increase.”

Offshore construction of the Extension is expected to begin in 2016, and upon completion it is expected the project will be able to provide electricity for more than 230,000 UK homes. — Bloomberg

Renewable energy replaces lost European nuclear capacity

by John Brian Shannon John Brian Shannon

Nuclear reactors are starting to shut down in Europe

It began in earnest in the wake of the Fukushima disaster when Germany inspected its problem-plagued nuclear power plants and decided to take 9 of its nuclear power plants offline in 2011 and the rest offline by 2022.

There is plenty of public support in the country for Germany’s planned nuclear closures, even with the additional fee added to each German electricity bill to pay for nuclear power plant decommissioning, which completes in 2045.

Switzerland likewise has decided to get out of the nuclear power business beginning in 2015 and decommission their nuclear power plants by 2045.

Other European nations are also looking at retiring their nuclear power plants. But the news today is about the UK, Belgium, Germany and Spain.

Heysham_Nuclear_Power_Station UK operated by EDF
Heysham Nuclear Power Station in the UK which is operated by EDF of France. Image courtesy: CleanTechnica.com

In the UK, four (French-operated) EDF reactors built in 1983 have been shut down after one of them was found to have a crack in its centre spine. (EDF stands for Electricity de France which is a French utility responsible for managing many nuclear reactors)

At first only the affected unit was taken offline (in June) but upon further inspection it was determined that the other three were at risk to fail in the coming months. Whether or not these four reactors can be repaired economically — all were scheduled to be decommissioned before 2020.

The sudden shortfall in electrical generation due to these unscheduled nuclear power plant shutdowns has been met by 5 GW of new wind power generation, which has seamlessly stepped in to fill demand.

Additional to that, another 5 GW of solar power has been added to the UK grid within the past 5 years. And that’s in cloudy olde England, mates!

In Belgium, 3 out of 5 of their nuclear power plants are offline until December 31, 2014 due to maintenance, sabotage, or terror attacks — depending upon whom you talk to.

Belgium’s Doel 4 reactor experienced a deliberate malfunction last week and workers in the country’s n-plants are henceforth directed to move around inside the plants in pairs.

Also, their Tihange 2 reactor won’t be ready to resume power production until late March, 2021. See this continuously-updated (and long) list of nuclear power plant shutdowns in Belgium.

Further, the utility has advised citizens that hour-long blackouts will commence in October due to a combination of unexpected n-plant shutdowns and higher demand at that time of year.

Belgian energy company Electrabel said its Doel 4 nuclear reactor would stay offline at least until the end of this year after major damage to its turbine, with the cause confirmed as sabotage.

Doel 4 is the youngest of four reactors at the Doel nuclear plant, 20 km north of Antwerp, Belgium’s second-biggest city. The country has three more reactors in Tihange, 25 km southwest of the city of Liege.

Doel 1 and 2, which came on line in 1975, are set to close in 2015. Tihange 1, which also started operation in 1975 and was designed to last 30 years, got a 10-year extension till 2015.

The two closed reactors Doel 3 and Tihange 2 were connected to the grid in 1982 and 1983. Doel 4 and Tihange 3, which came on line in 1985, were operating normally until the closure of Doel 4 last week.

The shutdown of Doel 4’s nearly 1 gigawatt (GW) of electricity generating capacity as well as closures of two other reactors (Doel 3 and Tihange 2) for months because of cracks in steel reactor casings adds up to just over 3 GW of Belgian nuclear capacity that is offline, more than half of the total.

In Britain, EDF Energy, owned by France’s EDF, took three of its nuclear reactors offline for inspection on Monday after finding a defect in a reactor of a similar design. – Reuters

In Germany, the nuclear power generation capacity missing since 2011 has been met by a combination of solar, wind, bio, natural gas, and unfortunately some coal. But that sounds worse than it is.

According to the Fraunhofer Institute, renewable energy produced about 81 TWh, or 31% of the nation’s electricity during the first half of 2014. Solar production is up 28%, wind 19% and biomass 7% over last year.

Meanwhile, with the exception of nuclear energy, all conventional sources are producing less. The output from gas powered plants was half of what it had been in 2010 and brown coal powered plants are producing at a similar level to 2010-2012. – CleanTechnica.com

Let’s see what our friends at the Fraunhofer Institute have to say in their comparison of the first half of 2013 vs. the first half of 2014.

German electricity production H1 2013 - H1 2014
Fraunhofer Institute compares the different energy production between the first half of 2013 and the first half of 2014.

Although unspokenby power company executives operating in Germany, Spain, and some other European countries, the panic felt by traditional power generators is due to the massive changes in ‘their’ market since 2009.

Things move slowly in the utility industry — ten years is seen as a mere eyeblink in time, as the industry changes very little decade over decade. Recent changes must be mind-blowing for European power company executives.

European-union-renewables-chart
European-union-renewables by Eurostat — Renewable energy statistics. Licensed under Public domain via Wikimedia Commons Keep in mind that this map displays results from 2012. The 2014 map will show significantly more ‘green’ energy, once that map becomes available in 2015.

It occurs to me that the end of the conventional energy stranglehold on Europe parallels the ending of Star Wars VI.

Help me take this mask off

It’s a mask to hide behind when conventional power producers don’t want the facts aired.

Fossil fuel and nuclear power generation have had (and continue to have) huge subsidy regimes in place which they don’t want publicly advertised — and they don’t want renewable energy power producers to have any subsidies. And conventional power producers don’t want fossil fuel externalities and nuclear power externalities advertised either. That’s a lot of hiding, right there.

Externalities are simply another form of subsidy to fossil fuel and nuclear power plant operators and their fuel supply chains, which usually take the form of additional public healthcare spending or environmental spending that is required to mitigate toxic airborne emissions, oil spills, etc.

Spain has ended it’s Feed-in-Tariff scheme for renewable energy, while keeping conventional power producer subsidies in place.

Not only that, suddenly homeowners aren’t allowed to collect power from the Sun or harvest power from the wind unless it is for their own use. Electricity cannot be collected by Spanish residents and then sold to the grid for example, nor to anyone else.

Spain’s government has taken it one step further in a bid to keep the conventional energy companies from drowning in their tears. After a meteoric rise in wind and solar capacity, Spain has now taxed renewable energy power producers retroactively to 2012 and ruled that renewable energy will be capped to 7.5% profit. Renewable energy profits over and above the 7.5% threshold instantly becomes instant tax revenue for the government. (Quite unlike conventional energy producers in the country which can make any amount of profit they want and continue to keep their subsidies)

While all of this has been going on, Spain and Portugal have quietly lowered their combined CO2 output by 21.3% (equal to 61.4 million fewer tonnes of CO2 emitted) since 2012, thanks to renewable energy.

But you’ll die

Not only has European renewable energy now stepped up to fill the voids due to nuclear power plant maintenance and sabotage shutdowns, it has scooped incredible market share from conventional power producers.

In January 2014, 91% of the monthly needed Portuguese electricity consumption was generated by renewable sources, although the real figure stands at 78%, as 14% was exported. – Wikipedia

Unwittingly, the German and Spanish power companies have provided the highest possible compliment to the renewable energy industry, and if publicized, it would read something like this;

“We can’t compete with renewable energy that has equal amounts of subsidy. Therefore, remove the renewable energy subsidy while we keep ‘our’ traditional subsidies, until we can reorient our business model – otherwise, we perish!”

Nothing can stop that now

Ending the European renewable energy Feed-in-Tariff schemes will only temporarily slow solar and wind installations as both have reached price-parity in recent months — against still-subsidized conventional power generators.

Even bigger changes are coming to the European electricity grid over the next few years. Nothing can stop that now.

Tell your sister; You were right about me

Conventional power producers in Europe provided secure and reliable power for decades, it was what powered the European postwar success story, but having the electricity grid all to themselves for decades meant that Europe’s utilities became set in their ways and although powerful, were not able to adapt quickly enough to a new kind of energy with zero toxicity and lower per unit cost.

Renewable energy, at first unguided and inexperienced, quickly found a role for itself and is now able to stand on its own feet without subsidies — unlike conventional power generators.

Considering the sheer scale of the energy changes underway in Europe, conventional energy has been superceded by a superior kind of energy and with surprisingly little drama.