This is a phenomenally powerful speech from the Prime Minister of Barbados at COP 26.
She says the world could use quantitative easing to beat climate change.
She is right.
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Indeed. I heard her speech live (on BBC World I think) and was mightily impressed.
Great speech. Channeling Max Bygraves: I wanna tell you a story – two maybe three actually
Mate used to work for the Barbados power company & therein lies a de-carb problem which one could extend from Barbados across the planet (to developed and less developed alike). The problem is old-style thinking with respect to renewables & de-carb. Example:
https://www.wartsila.com/media/news/23-01-2020-wartsila-power-plant-to-support-reliability-of-electricity-system-and-renewable-capacity-in-barbados-2622917
So some more fossil gen’ is the solution to more renewables? This is comedy stuff given Wartsilla is also active in the area of hydrogen. The way to integrate more RES in Barbados (or indeed any closed electrical system) is to use electrolysers & H2 storage. Available now. & with a business case (which means you could go to a bank or indeed your local branch of the Central Bank for a bit of QE).
Barbados (an oddly a sunny place) with PV noticeable by its erm …….absence. I’m doing a project in South Wales – roof top PV is part of it – & the business case works………in South Wales. I will leave readers of this august organ to speculate which is sunnier – South Wales or Barbados. As for the yes-buts (where does the electricity go when you have too much) with respect to roof-top PV – chuck in some electrolysers & use the H2 for transport (oh look that well known greenie Lord Bamford has shown a converted diesel engine running on H2). Convert the transport on Barbados to H2 – Oh look we have just de-carbed elec & transport – & it has a business case. Easy, no. Doable, yes. In fairness there is a gov plan to install PV on 35,000 roofs tops (& resistant to a Cat 4 hurricane).
Windy place Barbados – number of wind turbines………zero. (there are plans… apparently)
Moving to Greece I can make exactly the same comments – from a position of authority because I once had a project to de-carb a Greek island – fully funded (money no problem) the problem was… the Greeks – lovely people – just can’t make up their minds (& let’s face it keeping the local diesel importers in business is important). & on & on it goes – pick a location & one will hear exactly the same self-serving bullshit. With the politicos being led up the garden path.
We have the tech, & speaking for my projects – money was never a problem – even for a Greek project (& we did look @ Barbados once, once was quite enough). The problem is in many/most cases old engineers, old thinking, not invented here and embedded interests. Scotland won’t be any different – Ineos has its claws well embedded in the Scottish body politic. Why has Barbados done something wrt roof-top PV? – I guess the politicos finally gave the idiot engineers like my mate Phil, a going kicking and told them to pull their fingers out (it never occurring to said engineers to maybe just look at things in a different way).
I’m not saying don’t do QE, fine do it, but from my perspective the problem ain’t a money problem, the problem is embedded interests as I & my fellow hooligans will soon find out with respect to an island to the west of Ingerland.
Rant over.
A worthwhile rant Mike
It get’s better – Barbadians pay more for their elec than you do. A lot more. In the land of fantasy – if I was able to roll out roof-top PV + electrolysers – I’d be fighting off the financiers – the returns would be so good AND the people would be getting elec for about 1/4 of what they pay now. Firmly in “you could not make it up” territory. What makes it worse: the power company is state-owned.
How to get to them?
Good points Mike – any suggestions for best source of data on current cost analyses of different energy sources?
Having recently been to Barbados, I did notice just what you described and wondered… (In my defence, it was the only place on the planet where we could meet up with our US based son and family after 2 years plus. Not a usual destination).
Point absolutely taken about conservatism and procrastination in many quarters – finance, engineering, politics. As part of an MSc in development I took a course on environmental decision making and did a case study on a major wind farm project in an area I know well. It had been 9 years in planning at that stage… Procrastination all round.
In a subsequent role at WWF I had several meetings with the then CEO of the Green Investment Bank. Ex-head of Merrill Lynch – one of those investment banks that went bust with a track record of disreputable behaviour – to put it politely. He was trying to convince me that all this renewable stuff was high risk investment! He did not realise that I have a background in banking… I was able explain to him why that was cobblers, and also to suggest that his track record in assessing investment risk might be questionable. He and his team (all ex investment bankears) were more interested in creating new tradable investment products than lending to renewables projects.
It’s going to take some seriously firm action to change the behaviour of the finance and investment sector and we are some way away from that. Little or no chance under the current government.
“any suggestions for best source of data on current cost analyses of different energy sources?”
This question has many different aspects. In terms of the two main renewables, PV & wind, the cost of a kWh from either tech is best gained by looking at the results of auctions run under CfDs (contracts for difference). These deliver the best indication of levelised cost of electricity (LCOEs) for a given point in time and at a given location. PV Magazine (www.pv-magazine.com/news/) usually carries up to date news.
This brings us to the next aspect: one can calculate the LCOE for a given tech. However, the LCOE only has meaning in both locational terms (where will the RES be located) and in terms of the WACC (weighted cost of capital) which is itself a reflection of the counter-party risk (who buys the elec?).
Locational considerations example: PV panel in south Spain output is close to 2MWh/year/kW. In the UK it is closer to 1MWh/year/kW. Same panel, same cost – but different cost per kWh. Utility-scale PV in south Portugal/south Spain was rolling in close to 1eurocent/kWh. That in the UK? North of 5pence/kWh (for reasons associated with WACC plus elevated project costs (+30%) compared to EU.
WACC problems (these relate partly to the points you made). There was an EU project called DIACORE looking at WACCs across Europe. Germany – wind – circa 3.5%. Ireland – wind – circa 9 – 10%. The divergence was attributed partly to regulatory regimes & thus risk.
Given the above, it becomes evident that when orgs’ such as IRENA or the half-wits at the IEA put out reports which contain “average” costs for a given technology – these have zero meaning, even in a single country (Germany – north-south PV & Wind LCOEs have a great divergence).
Then we move on to dealing with the fact that whilst renewables can be treated statistically up to 24hrs in advance (weather forecasts are very good these days – well the ones paid for are) beyond that RES is stochastic in nature. Electrical power systems are still in the process of dealing with this. That said, technologies such as electrolysers producing hydrogen have the ability to eliminate much of the stochastic element in RES output – with the H2 so produced being used to de-carb very difficult sectors (steel, cement, high-temp industrial heat etc). Is this a RES cost? or is it an opportunity.?
Moving back to your closing comments: risk in RES tech is mostly related to the counter-party risk – the tech is well understood to the point of being boring. Looking at large stuff, companies such as Orsted do not seem to have problems selling circa €2bn in bonds (dunno what the coupon is). The problem with the banksters is, I guess, the reality that RES mostly offers low returns when compared to fossil systems. Arguably, RES has a far lower risk profile per project (but low returns) compared to – drilling for offshore oil or gas – but once an oil or gas strike is made – the loot rolls in.
Most of the above is made from an EU perspective. That said for projects in the UK in the range £5m through to £100m there are not usually problems raising money, provided IRR looks OK and counter-party risk is handled.
Thanks
Thanks Mike – Ill check the sources.
My more cynical view of much of the banking world is that they are more interested in trading and speculation than what the rest of us might understand by investment. They want to be able to take their capital out at short notice.
Good for her.
Wow! What an inspiring speech! Passion, intellectual clarity AND a precise solution to financing. What more can you ask of a leader! Wonderful to hear.
A very powerful speech , yes, but with a state owned power company, why has it not already considered wind power and other environmentally acceptable solutions? Why employ a company using liquid fuel?
Some more explanations from the Prime Minister of Barbados would be appropriate.