The World Economic Forum’s ‘The Future of Electricity‘ report on power generation makes depressing reading.

Perhaps the pessimism about new technologies is predictable given that Davos represents large companies, not the innovative companies at frontier of energy transformation.

Even so, to say that renewable power sources, excluding hydro, are projected to generate less than a quarter of OECD electricity by 2040 is a strikingly conservative. The percentage is probably about 8% today.

Part of their pessimism seems to derive from a very outdated view of the economics of solar power. Take a look at the chart (right). It shows WEF’s estimates for the costs of electricity generation now and in the future.

The yellow line at the top, starting off the scale, is solar PV. A megawatt hour is said to cost well over $200 in 2016 (about £130). Even by 2030 it’ll be over $110.

PV in Dubai is already at half the price WEF predicts in 20130

I think the people in Davos may have been imbibing too much of the local homebrew. Today, in overcast Britain, groups of installers are racing to put panels on the ground as fast as they can across the southern counties to ensure that they get the current subsidy rates.

The price they get for a medium-sized commercial field? A subsidy of about $100 a megawatt hour (6.38 pence per kilowatt hour) plus the wholesale price of electricity. Let’s call that $70 a megawatt hour in addition.

So even in one of the least attractive parts of the world, PV is already cheaper than WEF says, and by a large margin. More tellingly, one of the latest auctions for installing PV, in Dubai in November last year, produced a figure of about $65 a megawatt hour.

Just to be clear: an installation firm promised to install a large PV farm if it was paid less than a third of the price that WEF says is the underlying cost of solar in 2016 – and about half the price it predicts for 2030.

Open a newspaper in most parts of the world today, and you’ll see optimistic references to the prospect of ‘grid parity’ for the best suited renewable in the local market, whether it is biomass, onshore wind, storage or PV.

A business-oriented organisation like WEF should spend more time in the outside world, sensing the excitement about the rates of progress of low-carbon technologies rather than unquestioningly repeating the five year old wisdom of its leading sponsors.

Perhaps most surprisingly, WEF’s cost figures are approximately 50% higher than those produced by the International Energy Agency, long a sceptic about the progress of PV. And its figures for onshore wind are equally wrong.

By now, I would have thought that at least parts of big business would have recognised the inevitability of the transition to renewables (with storage) and begun to look at how it could profitably participate.

WEF: what are your sources?

None of the projections, estimates or calculations in the report are given a source. We cannot check their accuracy or even the provenance of their figures.

I’m sure that the writers of the document have tried to use reasonable data. But the report is stacked full of statements made without any support or justification, many of which look highly contentious.

We are expected to believe, for example, that “wholesale electricity prices are expected to continue to rise by 57% in the EU” between now and 2040 at the same as retail prices are expected to stay the same. It doesn’t need an economist to say that such a combination is impossible.  

My confidence in the report’s recommendations was further shaken by WEF’s assertion that the EU had wasted $100bn by siting wind and PV in the wrong countries.

“It is obvious to most European citizens that southern Europe has the lion’s share of the solar irradiation while northern Europe has the wind”, says the report – before concluding that Germany has installed too much PV and Spain too much wind.

Wong again. 2013 estimates from the IEA suggest that the average productivity of a Spanish turbine was 26.9% of its maximum capacity, but only 18.5% in Germany. Spain’s wind turbines are almost 50% more productive than Germany’s. In fact Spain managed slightly more than the worldwide average and was only just below the UK or Denmark in average output.

The real stories the WEF missed

Actually, it isn’t that ‘northern Europe has the wind’ but rather that westerly coasts have high wind speeds, making Spain and Portugal’s Atlantic turbines better than almost any inshore areas in northern Europe.

There’s a second reason why Spain should have wind turbines: wind speeds are relatively poorly correlated with the winds in northern Europe. For a more secure European supply, turbines in Spain have a high value, particularly when interconnection with France is improved.

 And in the case of Germany, which does have much lower output from PV than Spain, the argument that it should have left the solar revolution to its southern neighbours is a remarkably ahistorical conclusion.

Without Germany’s very costly support of PV a decade ago we would not currently be looking at grid parity for solar across much of the world.

Chris Goodall is an expert on energy, environment and climate change and valued contributor to The Ecologist. He blogs at Carbon Commentary.

The report: ‘The Future of Electricity – Attracting Investment to Build Tomorrow’s Electricity Sector‘, written in collaboration with Bain & Company, “outlines recommendations to attract the needed investment and grasp these new opportunities.”

This article was originally published on Carbon Commentary.

Austria is to launch a legal challenge against the European Union’s (EU) decision to allow billions of pounds of subsidies for Hinkley Point C, casting fresh doubt over the UK’s first planned nuclear reactors in 20 years.

In October, the EU approved the controversial £17.6bn subsidy deal for the power station, which is expected to provide 7% of the UK’s electricity by 2023.

David Cameron had previously hailed the subsidy deal between the French state-owned EDF and the UK government as “a very big day for our country”. He also described the signing of the Hinkley deal as marking “the next generation of nuclear power in Britain“, for its ability to meet energy demand and contribute to long-term security of supply.

But the appeal by Austria, a non-nuclear nation, will be launched by April and could delay a final investment decision by the UK government for over two years.

The Guardian understands that Luxembourg is very likely to support the case in the European Court of Justice, arguing that the UK’s loan guarantees – over a 35-year period – constitute illegal state aid. Another EU country may follow suit.

“There has been a high-level decision by our Chancellor and Vice Chancellor to challenge the EU decision on Hinkley within two months of its publication in the EU’s official journal”, said Andreas Molin, the director of Austria’s environment ministry. The journal’s publication is expected in the next fortnight.

Stefan Pehringer, a foreign policy adviser to the Austrian federal chancellory said: “The Austrian government has announced its readiness to appeal against the EC’s [European Commission] decision concerning state aid for the Hinkley Point project, as it does not consider nuclear power to be a sustainable form of technology – neither in environmental nor in economic terms.”

Can Hinkley survive the 2015 election?

Work has already begun at the Hinkley site, which the UK government said will have a capacity of 3.3GW, with the electricity it generates bought at a strike-price of £92.50 per megawatt hour, around double the market rate.

EDF had planned to sign a long-awaited funding agreement with its Chinese investment partners in March, thought to be key to settling procurement plans for the £24.5bn build, and the precursor to a final investment decision.

But the lawsuit may delay such plans, and introduce uncertainty about the UK’s attitude towards Hinkley after elections in May.

The Austrian government’s analysis suggests that European court cases of this nature typically last for one and a half years. But “as this is going to be a more complicated and fundamental case, it will last a little bit longer”, Molin said. “Two years could be a rough guess.”

He added: “If you accept the argument that Hinkley constitutes a ‘market failure’ as put forward by the Commission, you could apply it to all other means of electricity production, probably all other forms of energy conversion, and it might even apply beyond the energy sector. We think that the single energy market itself is at stake in this case.”

The Commission’s hurried and paradoxical decision

The EU’s original decision last year surprised many observers, as the then-competition commissioner Joaquín Almunia had previously expressed scepticism about Hinkley’s’ conformity with an exhaustive list of strict state aid criteria.

These govern proportionality, decarbonisation, the potential for market distortion, the definition of ‘market failures’ and, crucially, whether the public monies advance an “objective of common interest” for the bloc.

No grounds for the Commission’s volte-face have yet been published, but the Guardian has seen a draft of the EU decision from last October, suggesting that one key decider had been advised that Hinkley advanced an EU ‘common interest’ around security of supply.

A Commission investigation declared itself “unsure” whether the reactor would resolve the UK’s security of supply issues, and was unconvinced that ‘diversification’ of supplies, on its own, would justify the monies involved.

“The Commission however accepted that the decision was in line with the Euratom treaty”, the draft ruling says. The Euratom treaty obliges member states to facilitate investments in nuclear power and encourage ventures that lead to the technology’s development.

Molin said that Austria would argue that the Euratom treaty could not be used in this way in state aid cases, but there would be other lines of dispute. “We will try to prove that the commission did not consider all the things which it should have considered and that there were some procedural flaws”, he said.

Minutes from the Commission’s internal discussion of the issue show that the EC’s president at the time, José Manuel Barroso, viewed the Hinkley decision as unprecedented, and said that it “touched on a politically sensitive topic”.

No contract for the Hinkley plant was put out to tender, and the ruling sparked outrage among environmentalists in the EU, that shows no signs of dying down.

“The Commission took a political decision disguised as a legal one”, said Mark Johnston, a senior adviser to the European Policy Centre. “Barroso thought it would be easier to bend over for Cameron than to defend the single energy market. The significance of the case for energy investments across Europe could not be greater.”

A ‘fatal blow’, claim the Greens

Molly Scott Cato, the Green Party MEP for the South West region, which includes Hinkley, said: “I think that this court case is certainly going to delay the signing and also the construction of Hinkley.”

“As one of the government’s main arguments for Hinkley was that it would solve the ‘energy gap’ before renewables could be brought onstream, it is a fatal blow to Hinkley as part of a future energy strategy for the UK.”

Natalie Bennett, the leader of the Green Party, said that such claims now seemed risible. “I think we have seen the final generation of nuclear power, I am very pleased to say. It’s gone, it’s dusted. Lets focus on evidence-based renewables and energy conservation futures.”

But the UKIP MEP and energy spokesman, Roger Helmer, offered strong support for nuclear energy, qualified only by a caveat that the government’s Hinkley deal had been “excessively expensive” because of regulatory uncertainty from Brussels.

“Given that Hinkley is a trailblazer for the new generation of nuclear and now looks like being held up for a long period of time, it will be extremely damaging – not just for nuclear but across the whole spectrum of industry”, he said.

No grounds for such state aid in EU treaties

Dr Dörte Fouquet, a lawyer for the Brussels-based law firm Becker Büttner Held, which specialises in energy and competition law, said Austria’s chances of success were “pretty high” because there were no grounds for giving such state aid under EU treaty law and Austria would question the common European interest in building a nuclear power plant in the UK.

She added that long delays now appeared inevitable: “A court process that kicks off in May would take a minimum of two years and if it goes into appeals, you’d then be looking at another two years. So it could be a minimum of three and a maximum of four years or longer.

But the Department of Energy and Climate Change remained bullish. “The UK is confident that the state aid case for Hinkley Point C is legally robust and we vigorously support the European Commission’s defence of its decision last year”, a  spokesman told the Guardian.

“This brings us one step closer to seeing new nuclear as part of our future low carbon energy mix. We have no reason to believe that Austria, or any other party, is preparing a case which has any merit.”

But DECC did not respond to questions about the effect that a lengthy court case might have on cost over-runs or a final investment decision.

The renewables industry has bridled at what some see as double-standards in EU decisions last year denying state aid to renewable energy in Germany, while allowing it for nuclear in the UK.

“It’s puzzling why the European Commission has decided to have a set of rules for one energy source and entirely different set for another”, said European Wind Energy Association spokesman Oliver Joy.

“If we want a level playing field for all energy forms in the EU then we need common standards that allow all technologies to compete on an equal footing.”

Arthur Neslen is the Europe environment correspondent at the Guardian. He has previously worked for the BBC, the Economist, Al Jazeera, and EurActiv, where his journalism won environmental awards. He has written two books about Israeli and Palestinian identity.

This article is a synthesis of two articles by Arthur Nelsen originally published on the Guardian: ‘Austria to launch lawsuit over Hinkley Point C nuclear subsidies‘ and ‘UK nuclear ambitions dealt fatal blow by Austrian legal challenge, say Greens‘. It is published on The Ecologist by kind permission via the Guardian Environment Network.

The BBC, ITV, Channel 4 and Sky will include party leaders from  seven political parties in this year’s pre-election debates including the Greens, the Scots Nationalists and Paid Cymru.

The biggest loser from the move is UKIP, which had previously been the only one of the smaller parties to be recognised as a ‘major party’, triggering widespread protest – and head-scratching.

The broadcasters are now offering two debates involving the leaders of the Conservatives, Labour, Liberal Democrats, UKIP, the SNP, the Green Party and Plaid Cymru; and a single closing debate between the Prime Minister and the Labour leader. 

One of the seven-party debates will be hosted by the BBC, and the other by ITV, and Channel 4 and Sky will co-host the final two-party debate. Proposed dates for the debates are the 2nd, 16th and 30th April.

And the broadcasters are clear that they will ’empty chair’ any party leader that declines the terms on offer. “The party leaders have been formally invited to take part in these debates”, reads a formal statement. “If any decide not to participate the debates would take place with those who accepted the invitation.”

‘This is the Green Spring’

“The decision to include the Greens in two debates is an acceptance by the broadcasters that we now are in an age of multi-party politics”, said Green Party Leader Natalie Bennett, who describes the current proposals as “fair and reasonable”.

“This groundbreaking decision serves the interests of both the electorate and British democracy. Our membership and polling surge demonstrates that when people hear about Green Party values and policies many embrace them.

“The political landscape is fracturing and fewer and fewer people want the business-as-usual politics offered by the traditional Westminster parties. This is the Green Spring.

“The fresh proposals means that Green Party policies that can bring real change to Britain – from bringing the railways back into public hands to a £10 minimum wage by 2020 to zero university tuition fees – will now be heard far more widely.”

Reacting to complaints of exclusion by Sinn Féin, the DUP and Respect, Bennett said: “I think it’s time to move on from the debate about the debates, and get on with the debate about the issues.”

The news is also welcomed by Plaid Cymru and the SNP, whose Leader Nicola Sturgeon said “the inclusion of the SNP, Plaid and the Greens will rightly show that politics beyond Westminster isn’t just an old boys club.”

Membership and poll success continues

Meanwhile the Green Party’s membership surge continues. As reported on The Ecologist, over 4,000 people joined the Greens in the space of two days last week when the ‘debate fever’ was at its height, pushing it above both UKIP and the LibDems on a single day.

By this morning the Greens had added more than 3,000 additional members, and the number of members now stands at over 48,000. On the basis of current trends, the party is likely to reach 50,000 members next week.

As well as showing support, the influx of members will also transform the Green Party’s finances. Even if the new members are only paying an average of £10 per year (reflecting a high proportion of students) an unscheduled £300,000 or so has reached the party’s coffers since January.

Opinion polls also show the Greens riding high. A 22nd January Yougov poll shows the Greens ahead of the LibDems with 8%, a lead of 1%, after briefly spiking at 10%. A Guardian/ICM poll published on 20th January shows the Greens on 9%, the highest recorded by ICM in more than 20 years, up 4% on the December figure.

But most interesting is the analysis of voters’ preferred outcome in the event of a hung Parliament, with the strongest support going to a Labour / SNP / Green coalition on 19% – more than any other arrangement. The least popular outcome was a minority Labour government, on 3%.

“The parties we used to relegate to the margins with the term ‘others’ are now moving centre stage”, Martin Boon of ICM told the Guardian. “The combined forces of all those outside the old LibLabCon triopoly has never been stronger during three decades of Guardian/ICM polling.”

But while the Greens are rightly celebrating their surge, they will now have to professionalise their act and prepare for far closer examination at both an individual and policy level, one Green Party veteran told The Ecologist:

“Finally the Greens have arrived on the mainstream political map, and this is something I have been fighting for for over thirty years”, he said. “But there is a cost to being taken seriously. Green policies will be scrutinised as never before and the same goes for Green politicians. The age of innocence is over.”

Oliver Tickell edits The Ecologist.

The World Economic Forum’s ‘The Future of Electricity‘ report on power generation makes depressing reading.

Perhaps the pessimism about new technologies is predictable given that Davos represents large companies, not the innovative companies at frontier of energy transformation.

Even so, to say that renewable power sources, excluding hydro, are projected to generate less than a quarter of OECD electricity by 2040 is a strikingly conservative. The percentage is probably about 8% today.

Part of their pessimism seems to derive from a very outdated view of the economics of solar power. Take a look at the chart (right). It shows WEF’s estimates for the costs of electricity generation now and in the future.

The yellow line at the top, starting off the scale, is solar PV. A megawatt hour is said to cost well over $200 in 2016 (about £130). Even by 2030 it’ll be over $110.

PV in Dubai is already at half the price WEF predicts in 20130

I think the people in Davos may have been imbibing too much of the local homebrew. Today, in overcast Britain, groups of installers are racing to put panels on the ground as fast as they can across the southern counties to ensure that they get the current subsidy rates.

The price they get for a medium-sized commercial field? A subsidy of about $100 a megawatt hour (6.38 pence per kilowatt hour) plus the wholesale price of electricity. Let’s call that $70 a megawatt hour in addition.

So even in one of the least attractive parts of the world, PV is already cheaper than WEF says, and by a large margin. More tellingly, one of the latest auctions for installing PV, in Dubai in November last year, produced a figure of about $65 a megawatt hour.

Just to be clear: an installation firm promised to install a large PV farm if it was paid less than a third of the price that WEF says is the underlying cost of solar in 2016 – and about half the price it predicts for 2030.

Open a newspaper in most parts of the world today, and you’ll see optimistic references to the prospect of ‘grid parity’ for the best suited renewable in the local market, whether it is biomass, onshore wind, storage or PV.

A business-oriented organisation like WEF should spend more time in the outside world, sensing the excitement about the rates of progress of low-carbon technologies rather than unquestioningly repeating the five year old wisdom of its leading sponsors.

Perhaps most surprisingly, WEF’s cost figures are approximately 50% higher than those produced by the International Energy Agency, long a sceptic about the progress of PV. And its figures for onshore wind are equally wrong.

By now, I would have thought that at least parts of big business would have recognised the inevitability of the transition to renewables (with storage) and begun to look at how it could profitably participate.

WEF: what are your sources?

None of the projections, estimates or calculations in the report are given a source. We cannot check their accuracy or even the provenance of their figures.

I’m sure that the writers of the document have tried to use reasonable data. But the report is stacked full of statements made without any support or justification, many of which look highly contentious.

We are expected to believe, for example, that “wholesale electricity prices are expected to continue to rise by 57% in the EU” between now and 2040 at the same as retail prices are expected to stay the same. It doesn’t need an economist to say that such a combination is impossible.  

My confidence in the report’s recommendations was further shaken by WEF’s assertion that the EU had wasted $100bn by siting wind and PV in the wrong countries.

“It is obvious to most European citizens that southern Europe has the lion’s share of the solar irradiation while northern Europe has the wind”, says the report – before concluding that Germany has installed too much PV and Spain too much wind.

Wong again. 2013 estimates from the IEA suggest that the average productivity of a Spanish turbine was 26.9% of its maximum capacity, but only 18.5% in Germany. Spain’s wind turbines are almost 50% more productive than Germany’s. In fact Spain managed slightly more than the worldwide average and was only just below the UK or Denmark in average output.

The real stories the WEF missed

Actually, it isn’t that ‘northern Europe has the wind’ but rather that westerly coasts have high wind speeds, making Spain and Portugal’s Atlantic turbines better than almost any inshore areas in northern Europe.

There’s a second reason why Spain should have wind turbines: wind speeds are relatively poorly correlated with the winds in northern Europe. For a more secure European supply, turbines in Spain have a high value, particularly when interconnection with France is improved.

 And in the case of Germany, which does have much lower output from PV than Spain, the argument that it should have left the solar revolution to its southern neighbours is a remarkably ahistorical conclusion.

Without Germany’s very costly support of PV a decade ago we would not currently be looking at grid parity for solar across much of the world.

Chris Goodall is an expert on energy, environment and climate change and valued contributor to The Ecologist. He blogs at Carbon Commentary.

The report: ‘The Future of Electricity – Attracting Investment to Build Tomorrow’s Electricity Sector‘, written in collaboration with Bain & Company, “outlines recommendations to attract the needed investment and grasp these new opportunities.”

This article was originally published on Carbon Commentary.

Austria is to launch a legal challenge against the European Union’s (EU) decision to allow billions of pounds of subsidies for Hinkley Point C, casting fresh doubt over the UK’s first planned nuclear reactors in 20 years.

In October, the EU approved the controversial £17.6bn subsidy deal for the power station, which is expected to provide 7% of the UK’s electricity by 2023.

David Cameron had previously hailed the subsidy deal between the French state-owned EDF and the UK government as “a very big day for our country”. He also described the signing of the Hinkley deal as marking “the next generation of nuclear power in Britain“, for its ability to meet energy demand and contribute to long-term security of supply.

But the appeal by Austria, a non-nuclear nation, will be launched by April and could delay a final investment decision by the UK government for over two years.

The Guardian understands that Luxembourg is very likely to support the case in the European Court of Justice, arguing that the UK’s loan guarantees – over a 35-year period – constitute illegal state aid. Another EU country may follow suit.

“There has been a high-level decision by our Chancellor and Vice Chancellor to challenge the EU decision on Hinkley within two months of its publication in the EU’s official journal”, said Andreas Molin, the director of Austria’s environment ministry. The journal’s publication is expected in the next fortnight.

Stefan Pehringer, a foreign policy adviser to the Austrian federal chancellory said: “The Austrian government has announced its readiness to appeal against the EC’s [European Commission] decision concerning state aid for the Hinkley Point project, as it does not consider nuclear power to be a sustainable form of technology – neither in environmental nor in economic terms.”

Can Hinkley survive the 2015 election?

Work has already begun at the Hinkley site, which the UK government said will have a capacity of 3.3GW, with the electricity it generates bought at a strike-price of £92.50 per megawatt hour, around double the market rate.

EDF had planned to sign a long-awaited funding agreement with its Chinese investment partners in March, thought to be key to settling procurement plans for the £24.5bn build, and the precursor to a final investment decision.

But the lawsuit may delay such plans, and introduce uncertainty about the UK’s attitude towards Hinkley after elections in May.

The Austrian government’s analysis suggests that European court cases of this nature typically last for one and a half years. But “as this is going to be a more complicated and fundamental case, it will last a little bit longer”, Molin said. “Two years could be a rough guess.”

He added: “If you accept the argument that Hinkley constitutes a ‘market failure’ as put forward by the Commission, you could apply it to all other means of electricity production, probably all other forms of energy conversion, and it might even apply beyond the energy sector. We think that the single energy market itself is at stake in this case.”

The Commission’s hurried and paradoxical decision

The EU’s original decision last year surprised many observers, as the then-competition commissioner Joaquín Almunia had previously expressed scepticism about Hinkley’s’ conformity with an exhaustive list of strict state aid criteria.

These govern proportionality, decarbonisation, the potential for market distortion, the definition of ‘market failures’ and, crucially, whether the public monies advance an “objective of common interest” for the bloc.

No grounds for the Commission’s volte-face have yet been published, but the Guardian has seen a draft of the EU decision from last October, suggesting that one key decider had been advised that Hinkley advanced an EU ‘common interest’ around security of supply.

A Commission investigation declared itself “unsure” whether the reactor would resolve the UK’s security of supply issues, and was unconvinced that ‘diversification’ of supplies, on its own, would justify the monies involved.

“The Commission however accepted that the decision was in line with the Euratom treaty”, the draft ruling says. The Euratom treaty obliges member states to facilitate investments in nuclear power and encourage ventures that lead to the technology’s development.

Molin said that Austria would argue that the Euratom treaty could not be used in this way in state aid cases, but there would be other lines of dispute. “We will try to prove that the commission did not consider all the things which it should have considered and that there were some procedural flaws”, he said.

Minutes from the Commission’s internal discussion of the issue show that the EC’s president at the time, José Manuel Barroso, viewed the Hinkley decision as unprecedented, and said that it “touched on a politically sensitive topic”.

No contract for the Hinkley plant was put out to tender, and the ruling sparked outrage among environmentalists in the EU, that shows no signs of dying down.

“The Commission took a political decision disguised as a legal one”, said Mark Johnston, a senior adviser to the European Policy Centre. “Barroso thought it would be easier to bend over for Cameron than to defend the single energy market. The significance of the case for energy investments across Europe could not be greater.”

A ‘fatal blow’, claim the Greens

Molly Scott Cato, the Green Party MEP for the South West region, which includes Hinkley, said: “I think that this court case is certainly going to delay the signing and also the construction of Hinkley.”

“As one of the government’s main arguments for Hinkley was that it would solve the ‘energy gap’ before renewables could be brought onstream, it is a fatal blow to Hinkley as part of a future energy strategy for the UK.”

Natalie Bennett, the leader of the Green Party, said that such claims now seemed risible. “I think we have seen the final generation of nuclear power, I am very pleased to say. It’s gone, it’s dusted. Lets focus on evidence-based renewables and energy conservation futures.”

But the UKIP MEP and energy spokesman, Roger Helmer, offered strong support for nuclear energy, qualified only by a caveat that the government’s Hinkley deal had been “excessively expensive” because of regulatory uncertainty from Brussels.

“Given that Hinkley is a trailblazer for the new generation of nuclear and now looks like being held up for a long period of time, it will be extremely damaging – not just for nuclear but across the whole spectrum of industry”, he said.

No grounds for such state aid in EU treaties

Dr Dörte Fouquet, a lawyer for the Brussels-based law firm Becker Büttner Held, which specialises in energy and competition law, said Austria’s chances of success were “pretty high” because there were no grounds for giving such state aid under EU treaty law and Austria would question the common European interest in building a nuclear power plant in the UK.

She added that long delays now appeared inevitable: “A court process that kicks off in May would take a minimum of two years and if it goes into appeals, you’d then be looking at another two years. So it could be a minimum of three and a maximum of four years or longer.

But the Department of Energy and Climate Change remained bullish. “The UK is confident that the state aid case for Hinkley Point C is legally robust and we vigorously support the European Commission’s defence of its decision last year”, a  spokesman told the Guardian.

“This brings us one step closer to seeing new nuclear as part of our future low carbon energy mix. We have no reason to believe that Austria, or any other party, is preparing a case which has any merit.”

But DECC did not respond to questions about the effect that a lengthy court case might have on cost over-runs or a final investment decision.

The renewables industry has bridled at what some see as double-standards in EU decisions last year denying state aid to renewable energy in Germany, while allowing it for nuclear in the UK.

“It’s puzzling why the European Commission has decided to have a set of rules for one energy source and entirely different set for another”, said European Wind Energy Association spokesman Oliver Joy.

“If we want a level playing field for all energy forms in the EU then we need common standards that allow all technologies to compete on an equal footing.”

Arthur Neslen is the Europe environment correspondent at the Guardian. He has previously worked for the BBC, the Economist, Al Jazeera, and EurActiv, where his journalism won environmental awards. He has written two books about Israeli and Palestinian identity.

This article is a synthesis of two articles by Arthur Nelsen originally published on the Guardian: ‘Austria to launch lawsuit over Hinkley Point C nuclear subsidies‘ and ‘UK nuclear ambitions dealt fatal blow by Austrian legal challenge, say Greens‘. It is published on The Ecologist by kind permission via the Guardian Environment Network.

The World Economic Forum’s ‘The Future of Electricity‘ report on power generation makes depressing reading.

Perhaps the pessimism about new technologies is predictable given that Davos represents large companies, not the innovative companies at frontier of energy transformation.

Even so, to say that renewable power sources, excluding hydro, are projected to generate less than a quarter of OECD electricity by 2040 is a strikingly conservative. The percentage is probably about 8% today.

Part of their pessimism seems to derive from a very outdated view of the economics of solar power. Take a look at the chart (right). It shows WEF’s estimates for the costs of electricity generation now and in the future.

The yellow line at the top, starting off the scale, is solar PV. A megawatt hour is said to cost well over $200 in 2016 (about £130). Even by 2030 it’ll be over $110.

PV in Dubai is already at half the price WEF predicts in 20130

I think the people in Davos may have been imbibing too much of the local homebrew. Today, in overcast Britain, groups of installers are racing to put panels on the ground as fast as they can across the southern counties to ensure that they get the current subsidy rates.

The price they get for a medium-sized commercial field? A subsidy of about $100 a megawatt hour (6.38 pence per kilowatt hour) plus the wholesale price of electricity. Let’s call that $70 a megawatt hour in addition.

So even in one of the least attractive parts of the world, PV is already cheaper than WEF says, and by a large margin. More tellingly, one of the latest auctions for installing PV, in Dubai in November last year, produced a figure of about $65 a megawatt hour.

Just to be clear: an installation firm promised to install a large PV farm if it was paid less than a third of the price that WEF says is the underlying cost of solar in 2016 – and about half the price it predicts for 2030.

Open a newspaper in most parts of the world today, and you’ll see optimistic references to the prospect of ‘grid parity’ for the best suited renewable in the local market, whether it is biomass, onshore wind, storage or PV.

A business-oriented organisation like WEF should spend more time in the outside world, sensing the excitement about the rates of progress of low-carbon technologies rather than unquestioningly repeating the five year old wisdom of its leading sponsors.

Perhaps most surprisingly, WEF’s cost figures are approximately 50% higher than those produced by the International Energy Agency, long a sceptic about the progress of PV. And its figures for onshore wind are equally wrong.

By now, I would have thought that at least parts of big business would have recognised the inevitability of the transition to renewables (with storage) and begun to look at how it could profitably participate.

WEF: what are your sources?

None of the projections, estimates or calculations in the report are given a source. We cannot check their accuracy or even the provenance of their figures.

I’m sure that the writers of the document have tried to use reasonable data. But the report is stacked full of statements made without any support or justification, many of which look highly contentious.

We are expected to believe, for example, that “wholesale electricity prices are expected to continue to rise by 57% in the EU” between now and 2040 at the same as retail prices are expected to stay the same. It doesn’t need an economist to say that such a combination is impossible.  

My confidence in the report’s recommendations was further shaken by WEF’s assertion that the EU had wasted $100bn by siting wind and PV in the wrong countries.

“It is obvious to most European citizens that southern Europe has the lion’s share of the solar irradiation while northern Europe has the wind”, says the report – before concluding that Germany has installed too much PV and Spain too much wind.

Wong again. 2013 estimates from the IEA suggest that the average productivity of a Spanish turbine was 26.9% of its maximum capacity, but only 18.5% in Germany. Spain’s wind turbines are almost 50% more productive than Germany’s. In fact Spain managed slightly more than the worldwide average and was only just below the UK or Denmark in average output.

The real stories the WEF missed

Actually, it isn’t that ‘northern Europe has the wind’ but rather that westerly coasts have high wind speeds, making Spain and Portugal’s Atlantic turbines better than almost any inshore areas in northern Europe.

There’s a second reason why Spain should have wind turbines: wind speeds are relatively poorly correlated with the winds in northern Europe. For a more secure European supply, turbines in Spain have a high value, particularly when interconnection with France is improved.

 And in the case of Germany, which does have much lower output from PV than Spain, the argument that it should have left the solar revolution to its southern neighbours is a remarkably ahistorical conclusion.

Without Germany’s very costly support of PV a decade ago we would not currently be looking at grid parity for solar across much of the world.

Chris Goodall is an expert on energy, environment and climate change and valued contributor to The Ecologist. He blogs at Carbon Commentary.

The report: ‘The Future of Electricity – Attracting Investment to Build Tomorrow’s Electricity Sector‘, written in collaboration with Bain & Company, “outlines recommendations to attract the needed investment and grasp these new opportunities.”

This article was originally published on Carbon Commentary.

Austria is to launch a legal challenge against the European Union’s (EU) decision to allow billions of pounds of subsidies for Hinkley Point C, casting fresh doubt over the UK’s first planned nuclear reactors in 20 years.

In October, the EU approved the controversial £17.6bn subsidy deal for the power station, which is expected to provide 7% of the UK’s electricity by 2023.

David Cameron had previously hailed the subsidy deal between the French state-owned EDF and the UK government as “a very big day for our country”. He also described the signing of the Hinkley deal as marking “the next generation of nuclear power in Britain“, for its ability to meet energy demand and contribute to long-term security of supply.

But the appeal by Austria, a non-nuclear nation, will be launched by April and could delay a final investment decision by the UK government for over two years.

The Guardian understands that Luxembourg is very likely to support the case in the European Court of Justice, arguing that the UK’s loan guarantees – over a 35-year period – constitute illegal state aid. Another EU country may follow suit.

“There has been a high-level decision by our Chancellor and Vice Chancellor to challenge the EU decision on Hinkley within two months of its publication in the EU’s official journal”, said Andreas Molin, the director of Austria’s environment ministry. The journal’s publication is expected in the next fortnight.

Stefan Pehringer, a foreign policy adviser to the Austrian federal chancellory said: “The Austrian government has announced its readiness to appeal against the EC’s [European Commission] decision concerning state aid for the Hinkley Point project, as it does not consider nuclear power to be a sustainable form of technology – neither in environmental nor in economic terms.”

Can Hinkley survive the 2015 election?

Work has already begun at the Hinkley site, which the UK government said will have a capacity of 3.3GW, with the electricity it generates bought at a strike-price of £92.50 per megawatt hour, around double the market rate.

EDF had planned to sign a long-awaited funding agreement with its Chinese investment partners in March, thought to be key to settling procurement plans for the £24.5bn build, and the precursor to a final investment decision.

But the lawsuit may delay such plans, and introduce uncertainty about the UK’s attitude towards Hinkley after elections in May.

The Austrian government’s analysis suggests that European court cases of this nature typically last for one and a half years. But “as this is going to be a more complicated and fundamental case, it will last a little bit longer”, Molin said. “Two years could be a rough guess.”

He added: “If you accept the argument that Hinkley constitutes a ‘market failure’ as put forward by the Commission, you could apply it to all other means of electricity production, probably all other forms of energy conversion, and it might even apply beyond the energy sector. We think that the single energy market itself is at stake in this case.”

The Commission’s hurried and paradoxical decision

The EU’s original decision last year surprised many observers, as the then-competition commissioner Joaquín Almunia had previously expressed scepticism about Hinkley’s’ conformity with an exhaustive list of strict state aid criteria.

These govern proportionality, decarbonisation, the potential for market distortion, the definition of ‘market failures’ and, crucially, whether the public monies advance an “objective of common interest” for the bloc.

No grounds for the Commission’s volte-face have yet been published, but the Guardian has seen a draft of the EU decision from last October, suggesting that one key decider had been advised that Hinkley advanced an EU ‘common interest’ around security of supply.

A Commission investigation declared itself “unsure” whether the reactor would resolve the UK’s security of supply issues, and was unconvinced that ‘diversification’ of supplies, on its own, would justify the monies involved.

“The Commission however accepted that the decision was in line with the Euratom treaty”, the draft ruling says. The Euratom treaty obliges member states to facilitate investments in nuclear power and encourage ventures that lead to the technology’s development.

Molin said that Austria would argue that the Euratom treaty could not be used in this way in state aid cases, but there would be other lines of dispute. “We will try to prove that the commission did not consider all the things which it should have considered and that there were some procedural flaws”, he said.

Minutes from the Commission’s internal discussion of the issue show that the EC’s president at the time, José Manuel Barroso, viewed the Hinkley decision as unprecedented, and said that it “touched on a politically sensitive topic”.

No contract for the Hinkley plant was put out to tender, and the ruling sparked outrage among environmentalists in the EU, that shows no signs of dying down.

“The Commission took a political decision disguised as a legal one”, said Mark Johnston, a senior adviser to the European Policy Centre. “Barroso thought it would be easier to bend over for Cameron than to defend the single energy market. The significance of the case for energy investments across Europe could not be greater.”

A ‘fatal blow’, claim the Greens

Molly Scott Cato, the Green Party MEP for the South West region, which includes Hinkley, said: “I think that this court case is certainly going to delay the signing and also the construction of Hinkley.”

“As one of the government’s main arguments for Hinkley was that it would solve the ‘energy gap’ before renewables could be brought onstream, it is a fatal blow to Hinkley as part of a future energy strategy for the UK.”

Natalie Bennett, the leader of the Green Party, said that such claims now seemed risible. “I think we have seen the final generation of nuclear power, I am very pleased to say. It’s gone, it’s dusted. Lets focus on evidence-based renewables and energy conservation futures.”

But the UKIP MEP and energy spokesman, Roger Helmer, offered strong support for nuclear energy, qualified only by a caveat that the government’s Hinkley deal had been “excessively expensive” because of regulatory uncertainty from Brussels.

“Given that Hinkley is a trailblazer for the new generation of nuclear and now looks like being held up for a long period of time, it will be extremely damaging – not just for nuclear but across the whole spectrum of industry”, he said.

No grounds for such state aid in EU treaties

Dr Dörte Fouquet, a lawyer for the Brussels-based law firm Becker Büttner Held, which specialises in energy and competition law, said Austria’s chances of success were “pretty high” because there were no grounds for giving such state aid under EU treaty law and Austria would question the common European interest in building a nuclear power plant in the UK.

She added that long delays now appeared inevitable: “A court process that kicks off in May would take a minimum of two years and if it goes into appeals, you’d then be looking at another two years. So it could be a minimum of three and a maximum of four years or longer.

But the Department of Energy and Climate Change remained bullish. “The UK is confident that the state aid case for Hinkley Point C is legally robust and we vigorously support the European Commission’s defence of its decision last year”, a  spokesman told the Guardian.

“This brings us one step closer to seeing new nuclear as part of our future low carbon energy mix. We have no reason to believe that Austria, or any other party, is preparing a case which has any merit.”

But DECC did not respond to questions about the effect that a lengthy court case might have on cost over-runs or a final investment decision.

The renewables industry has bridled at what some see as double-standards in EU decisions last year denying state aid to renewable energy in Germany, while allowing it for nuclear in the UK.

“It’s puzzling why the European Commission has decided to have a set of rules for one energy source and entirely different set for another”, said European Wind Energy Association spokesman Oliver Joy.

“If we want a level playing field for all energy forms in the EU then we need common standards that allow all technologies to compete on an equal footing.”

Arthur Neslen is the Europe environment correspondent at the Guardian. He has previously worked for the BBC, the Economist, Al Jazeera, and EurActiv, where his journalism won environmental awards. He has written two books about Israeli and Palestinian identity.

This article is a synthesis of two articles by Arthur Nelsen originally published on the Guardian: ‘Austria to launch lawsuit over Hinkley Point C nuclear subsidies‘ and ‘UK nuclear ambitions dealt fatal blow by Austrian legal challenge, say Greens‘. It is published on The Ecologist by kind permission via the Guardian Environment Network.

The World Economic Forum’s ‘The Future of Electricity‘ report on power generation makes depressing reading.

Perhaps the pessimism about new technologies is predictable given that Davos represents large companies, not the innovative companies at frontier of energy transformation.

Even so, to say that renewable power sources, excluding hydro, are projected to generate less than a quarter of OECD electricity by 2040 is a strikingly conservative. The percentage is probably about 8% today.

Part of their pessimism seems to derive from a very outdated view of the economics of solar power. Take a look at the chart (right). It shows WEF’s estimates for the costs of electricity generation now and in the future.

The yellow line at the top, starting off the scale, is solar PV. A megawatt hour is said to cost well over $200 in 2016 (about £130). Even by 2030 it’ll be over $110.

PV in Dubai is already at half the price WEF predicts in 20130

I think the people in Davos may have been imbibing too much of the local homebrew. Today, in overcast Britain, groups of installers are racing to put panels on the ground as fast as they can across the southern counties to ensure that they get the current subsidy rates.

The price they get for a medium-sized commercial field? A subsidy of about $100 a megawatt hour (6.38 pence per kilowatt hour) plus the wholesale price of electricity. Let’s call that $70 a megawatt hour in addition.

So even in one of the least attractive parts of the world, PV is already cheaper than WEF says, and by a large margin. More tellingly, one of the latest auctions for installing PV, in Dubai in November last year, produced a figure of about $65 a megawatt hour.

Just to be clear: an installation firm promised to install a large PV farm if it was paid less than a third of the price that WEF says is the underlying cost of solar in 2016 – and about half the price it predicts for 2030.

Open a newspaper in most parts of the world today, and you’ll see optimistic references to the prospect of ‘grid parity’ for the best suited renewable in the local market, whether it is biomass, onshore wind, storage or PV.

A business-oriented organisation like WEF should spend more time in the outside world, sensing the excitement about the rates of progress of low-carbon technologies rather than unquestioningly repeating the five year old wisdom of its leading sponsors.

Perhaps most surprisingly, WEF’s cost figures are approximately 50% higher than those produced by the International Energy Agency, long a sceptic about the progress of PV. And its figures for onshore wind are equally wrong.

By now, I would have thought that at least parts of big business would have recognised the inevitability of the transition to renewables (with storage) and begun to look at how it could profitably participate.

WEF: what are your sources?

None of the projections, estimates or calculations in the report are given a source. We cannot check their accuracy or even the provenance of their figures.

I’m sure that the writers of the document have tried to use reasonable data. But the report is stacked full of statements made without any support or justification, many of which look highly contentious.

We are expected to believe, for example, that “wholesale electricity prices are expected to continue to rise by 57% in the EU” between now and 2040 at the same as retail prices are expected to stay the same. It doesn’t need an economist to say that such a combination is impossible.  

My confidence in the report’s recommendations was further shaken by WEF’s assertion that the EU had wasted $100bn by siting wind and PV in the wrong countries.

“It is obvious to most European citizens that southern Europe has the lion’s share of the solar irradiation while northern Europe has the wind”, says the report – before concluding that Germany has installed too much PV and Spain too much wind.

Wong again. 2013 estimates from the IEA suggest that the average productivity of a Spanish turbine was 26.9% of its maximum capacity, but only 18.5% in Germany. Spain’s wind turbines are almost 50% more productive than Germany’s. In fact Spain managed slightly more than the worldwide average and was only just below the UK or Denmark in average output.

The real stories the WEF missed

Actually, it isn’t that ‘northern Europe has the wind’ but rather that westerly coasts have high wind speeds, making Spain and Portugal’s Atlantic turbines better than almost any inshore areas in northern Europe.

There’s a second reason why Spain should have wind turbines: wind speeds are relatively poorly correlated with the winds in northern Europe. For a more secure European supply, turbines in Spain have a high value, particularly when interconnection with France is improved.

 And in the case of Germany, which does have much lower output from PV than Spain, the argument that it should have left the solar revolution to its southern neighbours is a remarkably ahistorical conclusion.

Without Germany’s very costly support of PV a decade ago we would not currently be looking at grid parity for solar across much of the world.

Chris Goodall is an expert on energy, environment and climate change and valued contributor to The Ecologist. He blogs at Carbon Commentary.

The report: ‘The Future of Electricity – Attracting Investment to Build Tomorrow’s Electricity Sector‘, written in collaboration with Bain & Company, “outlines recommendations to attract the needed investment and grasp these new opportunities.”

This article was originally published on Carbon Commentary.