Press review 31-08-2013

Feudalism is the name by which is known today the socio-economic structure that dominated in Europe during Mediaeval times. One of the pillars of the feudal system was land ownership: the state was divided into fiefs, each owned by a single person, the Lord. Everyone else living in the fief, the Peasants, were obliged to pay a tax to access the land, usualy in labour or kind. Peasants were mostly subsistence farmers, hence land was the most important productivity factor of the time. This economic aspect of Feudalism is also called Manorialism, and produced an highly unequal society with wealth concentrated on a very few (the Nobility).

These days the government of Spain is trying to instate Feudalism again, by imposing a tax on solar irradiation. Such is the content of a draft royal decree presented by the government late last month that tries to put an end to the growth of off-the-grid PV. I wrote before that governments could eventually try to make PV illegal, but this proposal defies imagination. If such absurdity ever comes to pass in Parliament a legal battle is sure to follow. It is not easy to see how it squares with the constitution of a modern democracy and even with European law.

Businessweek
Spain Hurts Solar With Plan to Penalize Power Producers
Marc Roca, 01-08-2013

Spain plans to make consumers pay for the clean electricity they generate and use themselves, a move unheard of in any other market.

A new draft bill on power consumption includes a fee for electricity that’s generated by solar panels or other renewable sources and used on-site, the text shows. The draft is being reviewed by industry regulator CNE.

Spain is seeking to curb solar growth after payments to producers helped drive up power bills. The measures threaten its small-scale photovoltaic market, an industry in its infancy even as it booms in the U.K., Germany and North America. U.S. utilities have sought to limit payments for rooftop solar as they’re forced to credit producers for power not used on site.

“The decree is an attack to market freedom that aims to prevent people from competing with established utilities,” Jose Donoso, managing director of Spain’s solar lobby group UNEF, said in an interview. “It’s like if they charged you when you turn off electric heaters and use a wood stove.”

Bewilderment, that's how the press and the blogosphere have reacted. But beyond the energy aspect of the discussion there's an important political dimension that should not be omitted. Europe has seen a continuous quality degradation of those elected for office. This draft royal decree is coming from a government leaded by a man stained by successive scandals, with serious evidence of corruption. Citizens must reflect on this and start contemplating voting for alternative parties.

Forbes
Out Of Ideas And In Debt, Spain Sets Sights On Taxing The Sun
Kelly Phillips Erb, 19-08-2013

You get the feeling that government officials were out of ideas, stared up at the sky one day and thought, “I’ve got it! We’ll tax the sun!”

But wait, it gets worse. You see, not only has the use of solar panels has made it possible for many in the country to produce their own energy for less than what they would have paid the utility company, many residents in Spain generate enough electricity from solar that they get paid to selling the excess energy back to producers. This, it turns out, is a problem. The government is putting a stop to that, too: as part of the reform efforts (read: desperate measures), there will be a prohibition on selling extra energy.

And there’s still more: in order to figure out who is producing what level of energy (and, of course, to tax it), all solar panels now have to be hooked up to the grid. Those taxpayers who don’t connect to the grid face a fine of up to 30 million euros ($40 million U.S.). Yes, million. With an m. That kind of number is so incomprehensible to the average person that it’s almost like they pulled it out of nowhere, as if the conversation went something like this:

Maybe 10 euros? Nah, not nearly enough.

What about 100 million euros? No, way too much.

30 million euros? Yeah, that sounds about right.

The reason behind this incomprehensible policy is out there for everyone to see. Cheap and scalable PV does not have a place in the traditional centralised electrical grid; nor in the profit system the grid sustains.

Bloomberg
European utilities pressured by renewable energy
14-08-2013

Bloomberg New Energy Finance's Brian Potskowski reports on the pressure felt by European utilities from renewable energy sources and the steps companies are taking to combat the competition. He speaks on Bloomberg Television's "The Pulse."

A small datum that is a sign of the times: China is bound to become the largest petroleum importer in the world. Europe as a whole is far ahead, but in our case imports are well into the decline phase.

Le Monde
La Chine va devenir le premier importateur de pétrole
13-08-2013

La Chine, dont les besoins en énergie augmentent sans cesse, va cette année doubler les Etats-Unis pour devenir le premier importateur net de pétrole du monde, selon une projection de l'Agence américaine d'information sur l'Energie (EIA).

Les importations nettes de pétrole de Pékin devraient dépasser celles de Washington d'ici octobre 2013, précise l'EIA, qui dépend du ministère américain de l'Energie (DoE). Ce résultat s'explique par "une hausse continue de la demande chinoise, une hausse de la production aux Etats-Unis et un niveau stationnaire de la demande en pétrole sur le marché américain".

Still on China, there were more news these days related to the limits of its water supply. I already highlighted the constraints water availability is imposing on coal extraction, but apparently that is just one aspect of a much larger problem. China is track for a clash with sustainability.

Mother Jones
6 Mind-Boggling Facts About Farms in China
Tom Philpott, 13-08-2013

Now, none of that should detract from the food miracle that China has enacted since it began its transformation into an industrial powerhouse in the late 1970s. This 2013 report from the United Nation's Food and Agriculture Organization and the Organization for Economic Co-operation and Development (OECD) brims with data on this feat. The nation slashed its hunger rate—from 20 percent of its population in 1990 to 12 percent today —by quietly turbocharging its farms. China's total farm output, a broad measure of food churned out, has tripled since 1978. The ramp-up in livestock production in particular is even more dizzying—it rose by a factor of five. Overall, China's food system represents a magnificent achievement: It feeds nearly a quarter of the globe's people on just 7 percent of its arable land.

But now, 35 years since it began reforming its state-dominated economy along market lines, China's spectacular run as provider of its own food is looking severely strained. Its citizens' appetite for meat is rising along with incomes, and mass-producing steaks and chops for 1.2 billion people requires tremendous amounts of land and water. Meanwhile, its manufacturing miracle—the very thing that financed its food miracle—has largely fouled up or just plain swallowed those very resources.

And today is a special day, TheOilDrum is folding after more than eight years of energy discussions. It is not an entire surprise, in light of the dominant editorial line in recent years, but still a sad moment. During its first years TheOiDrum was probably the best blog around, discussing things that really did matter, still matter and will matter for many years to come. Although what is closing down is not that old blog I miss (and that probably can't come back), it is consternating to know that there will be no new essays in its front page. A reflection on TheOilDrum and its impact is about to come, possibly sometime during September.

The Telegraph
Commodity supercycle in rude health despite shale
Ambrose Evans-Pritchard, 31-07-2013

The Oil Drum is closing down after eight years, giving up the long struggle to alert us all to "peak oil" and the dangers of an energy crunch. Readers have been drifting away. The theme has gone out of fashion, eclipsed by shale and fracking in the US.

The demise of Britain's leading website for oil dissidents has been seized on by critics as an admission that peak oil is just another malthusian myth like so many before. It comes amid a spate of reports from global banks announcing the death of the commodity supercycle, slain by creative technology and a surge of new supply.

Yet if you stand back, it is hardly evident that the world is again enjoying abundant sources of cheap energy, metals or indeed food. Commodity prices have held up remarkably well given that we are in a global trade depression, albeit one contained by monetary stimulus.

That's it for this time. Stay well.