Death by Hot Air and Other Cautionary Tales
13th November 2018 – Brian’s Musings – Death by Hot Air and Other Cautionary Tales
Welcome to the thirty fourth of Brian’s Musings. Apologies for the length but interesting data is streaming in from all manner of sources. As usual I have grouped the new information under the headings associated with the nine global forces I have identified.
South Africa
Some readers have criticised me for so seldom mentioning South Africa, especially since it is my home country, so I thought I’d get this newsletter rolling with some local commentary.
South Africa’s deputy energy minister, in Europe for meetings, trotted out the old refrain that because the economies of the developed world were built with coal, so sunny South Africa should be allowed to continue building coal fired power stations. She doesn’t seem to understand that solar and wind are now much cheaper than coal and, besides, coal burning leads to respiratory disease and death. No doubt her wisdom will have been applauded by her American and Australian counterparts!
Some new information backs this up. Greenpeace analysis of satellite data shows that the Mpumalanga area of South Africa, just east of Johannesburg and Pretoria, is the worst nitrogen dioxide air pollution hot spot on earth. Electrical utility Eskom, responsible for much of the pollution, has applied to the regulator for a more than 15% annual price increase during the period 2019 to 2022 to cover the costs of their coal fired generation and bloated bureaucracy. Electricity prices in South Africa increased 350% from 2007 to 2017, far, far ahead of inflation. The government’s draft Integrated Resource Plan plumps for a mixture of coal, gas and renewables even though acknowledging that wind and solar are the cheapest options. Of course. South Africa’s coal industry does employ 82,000 people who collectively earn more than R 22 billion a year; the renewable sector would employ even more but then, of course, there’s the coal mining unions cosying up to government.
Moving to the other half of the energy sector, Mestosync Energy is planning to build a 400,000 barrel a day oil refinery outside Port Elizabeth in South Africa’s Eastern Cape Province costing an estimated US$ 15 billion. It sounds like a herd of white elephants has escaped from the nearby Addo Elephant Park!
Low Cost Renewable Energy
While we’re on the subject of energy, I thought we’d take a look at the sanity and madness taking place elsewhere.
The United Kingdom’s Moorside nuclear plant project in Cumbria has been cancelled by Toshiba after more than £ 400 million had already been spent on the project and government plans to build a large gas fired plant are being challenged. The IEEFA predicts that the United States will close more than 15.4 GW of coal fired power capacity in 2018, a record amount pointing to an accelerated phasing out of coal despite that government’s best efforts.
IEEFA Australia predicts that a permanent, long-term decline in New South Wales thermal coal exports is likely after the pipeline of new coal plants in major Asian markets experienced a 74% decline since 2015, with more contraction expected. Japan, China, South Korea and Taiwan have all introduced policies to reduce the consumption of thermal coal while creating opportunities to increase the use of renewable energy. Imported thermal coal power in India costs double the current cost of renewables.
The Dubai Water and Electricity Authority is expanding the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park to 950MW and will sell the power at a world-record low of $US0.024/kWh. Renewables accounted for 38% of German electricity in the first nine months of 2018, almost overtaking coal for the first time, while carbon dioxide emissions dropped seven percent. Spain has rescinded a tax on small scale solar installation and negotiated a €250 million agreement with trade unions under which most Spanish coal mines will be closed by the end of 2018.
Bloomberg New Energy Finance predicts that US$ 1.2 trillion will be invested in the battery sector by 2040 leading to battery prices halving. Canada’s Plateau Energy has discovered a large deposit of lithium in Peru. According to CRU, there are 47 large lithium projects underway worldwide.
Climate Change
The World Health Organisation has warned that 91% of the world's population live in areas with air pollution above WHO limits where they. breathe polluted air which increases the risk of debilitating and deadly diseases such as lung cancer, stroke, heart disease, and chronic bronchitis. Air pollution is now the world’s fourth-leading fatal health risk, causing ten percent of deaths in 2013. Nine of the ten most polluted cities are in India, with the tenth, surprise, surprise, Bamenda in Cameroon. A report in Nature calculated that 400,000 premature deaths a year are caused by emissions from dirty shipping fuel. As a result the International Maritime Organization has mandated that all shipping must use higher quality fuels by 2020 though there are suspicions that shipping companies are installing equipment on ships to bypass the regulations. I didn’t know Volkswagen built ships’ engines?
On his blog, Bill Gates points out that electricity generation accounts for only 25 percent of greenhouse gas emissions, with the balance coming from agriculture (24%), manufacturing (21%), transport (14%) and buildings (6%). I’m not sure he looked at his own IT industry as an article in Nature Climate Change claims that carbon dioxide emissions from Bitcoin mining alone could be enough to increase global temperatures by two degrees Celsius within just a couple of decades.
Canadian scientists have recorded that the glaciers in the St Elias Mountains of the Yukon are melting faster than would be expected from climate warming. Climate change has been cited as the major reason that California is again being roiled by deadly forest fires. To make North American environmental matters even more complicated, New York’s attorney general has filed a lawsuit against Exxon Mobil asserting that the company defrauded shareholders by downplaying the business risk of climate change.
The European parliament has overwhelmingly backed a wide-ranging ban on single-use plastics in an effort to tackle pollution in seas, fields and waterways. According to the Bureau of International Recycling more than 270 million tonnes of waste are recycled worldwide each year as part of a US$ 200 billion a year industry but China has recently severely limited imports of raw recycling material. Research from the WWF calculates that human kind has killed 60% of mammals, birds, fish and reptiles since 1970.
People Change:
As though I haven’t already spoken enough about death and destruction, the OECD has warned that more than 2.4 million people in North America, Europe and Australia will die before 2050 as a result of antibiotic superbug infections unless firm action is taken.
Autonomous Electric Vehicles
Still on my deathly theme, researchers at University of Chicago and Rice University have concluded that the rise of ride-sharing services such as Uber and Lyft has increased traffic deaths in the USA by 2% to 3% since 2011, equivalent to as many as 1,100 fatalities a year.
The IEA, normally conservative on renewable energy and related topics, is predicting there will be more than one billion electric cars, half the total, on the road by 2040. Data released by the European Automobile Manufacturers Association show that third quarter 2018 sales of alternatively powered vehicles in Europe are up by almost 30 per cent while diesel sales are on the decline. The highest increase in sales was seen in battery electric vehicles, with a 37.9 per cent increase across the EU. Across the Atlantic, Canadian electric vehicle sales in the year to October were up 158 per cent on 2017, while American sales were up more than 100 per cent with Tesla taking the lion’s share. Numbers for the world’s biggest market, China, where more than 300 electric car companies are registered, are not yet available for the same period but are also likely to show growth in excess of 100 per cent.
To help boost the market growth, Volkwagen is investing € 30 billion in producing new electric vehicles by 2020 in Zwickau and Shanghai which have the performance of a Tesla but cost considerably less. United Kingdom electronics company Dyson plans to produce electric cars in Singapore. From 30th November 2018, Madrid will ban cars with internal combustion engines from the city’s roads during the day. And it’s not just electric cars that are taking off - Eviation is building the first of its all-electric passenger aircraft in France which will carry up to 9 passengers and have a range of up to 1,000 Kilometres.
Waymo has been given regulatory approval to operate driverless cars in California. Baidu, which has been testing self-driving technology in China and the USA, signed an agreement with Volvo and Ford to produce autonomous electric cars in China.
Mass Data Mining and Storage
On a non death defying note, the United Kingdom has introduced a tax on the turnover of global data companies such as Google and Facebook. India has compelled international credit card companies, who mostly fly under the data hoarding radar, to store data originating in India on servers in India and nowhere else. Let’s watch for Europe following suit.
Automation Based Unemployment
With the American economy booming and unemployment way down, talk about automation based unemployment has become muted recently. However I was struck by a comment by eVestment that there are nearly 13,000 security analysts employed in the USA in addition to thousands in investment banking despite the number of listed companies halving in ten years and that only 14% of US equity funds have performed better than the stock market average. You would think it wouldn’t take much artificial intelligence to just follow the market average and put them all out of business?
Increasing Inequality
Research by UBS and PWC concluded that billionaires made more money in 2017 than in any year in recorded history increasing their wealth by twenty per cent to US$ 8.9 trillion. Clearly they know something the investment analyst community are missing.
The new Italian government is planning to introduce a “citizens’ income programme” which is not unlike a basic income grant. The EU is dead against the Italian government’s budget which includes this measure.
Welcome to the thirty fourth of Brian’s Musings. Apologies for the length but interesting data is streaming in from all manner of sources. As usual I have grouped the new information under the headings associated with the nine global forces I have identified.
South Africa
Some readers have criticised me for so seldom mentioning South Africa, especially since it is my home country, so I thought I’d get this newsletter rolling with some local commentary.
South Africa’s deputy energy minister, in Europe for meetings, trotted out the old refrain that because the economies of the developed world were built with coal, so sunny South Africa should be allowed to continue building coal fired power stations. She doesn’t seem to understand that solar and wind are now much cheaper than coal and, besides, coal burning leads to respiratory disease and death. No doubt her wisdom will have been applauded by her American and Australian counterparts!
Some new information backs this up. Greenpeace analysis of satellite data shows that the Mpumalanga area of South Africa, just east of Johannesburg and Pretoria, is the worst nitrogen dioxide air pollution hot spot on earth. Electrical utility Eskom, responsible for much of the pollution, has applied to the regulator for a more than 15% annual price increase during the period 2019 to 2022 to cover the costs of their coal fired generation and bloated bureaucracy. Electricity prices in South Africa increased 350% from 2007 to 2017, far, far ahead of inflation. The government’s draft Integrated Resource Plan plumps for a mixture of coal, gas and renewables even though acknowledging that wind and solar are the cheapest options. Of course. South Africa’s coal industry does employ 82,000 people who collectively earn more than R 22 billion a year; the renewable sector would employ even more but then, of course, there’s the coal mining unions cosying up to government.
Moving to the other half of the energy sector, Mestosync Energy is planning to build a 400,000 barrel a day oil refinery outside Port Elizabeth in South Africa’s Eastern Cape Province costing an estimated US$ 15 billion. It sounds like a herd of white elephants has escaped from the nearby Addo Elephant Park!
Low Cost Renewable Energy
While we’re on the subject of energy, I thought we’d take a look at the sanity and madness taking place elsewhere.
The United Kingdom’s Moorside nuclear plant project in Cumbria has been cancelled by Toshiba after more than £ 400 million had already been spent on the project and government plans to build a large gas fired plant are being challenged. The IEEFA predicts that the United States will close more than 15.4 GW of coal fired power capacity in 2018, a record amount pointing to an accelerated phasing out of coal despite that government’s best efforts.
IEEFA Australia predicts that a permanent, long-term decline in New South Wales thermal coal exports is likely after the pipeline of new coal plants in major Asian markets experienced a 74% decline since 2015, with more contraction expected. Japan, China, South Korea and Taiwan have all introduced policies to reduce the consumption of thermal coal while creating opportunities to increase the use of renewable energy. Imported thermal coal power in India costs double the current cost of renewables.
The Dubai Water and Electricity Authority is expanding the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park to 950MW and will sell the power at a world-record low of $US0.024/kWh. Renewables accounted for 38% of German electricity in the first nine months of 2018, almost overtaking coal for the first time, while carbon dioxide emissions dropped seven percent. Spain has rescinded a tax on small scale solar installation and negotiated a €250 million agreement with trade unions under which most Spanish coal mines will be closed by the end of 2018.
Bloomberg New Energy Finance predicts that US$ 1.2 trillion will be invested in the battery sector by 2040 leading to battery prices halving. Canada’s Plateau Energy has discovered a large deposit of lithium in Peru. According to CRU, there are 47 large lithium projects underway worldwide.
Climate Change
The World Health Organisation has warned that 91% of the world's population live in areas with air pollution above WHO limits where they. breathe polluted air which increases the risk of debilitating and deadly diseases such as lung cancer, stroke, heart disease, and chronic bronchitis. Air pollution is now the world’s fourth-leading fatal health risk, causing ten percent of deaths in 2013. Nine of the ten most polluted cities are in India, with the tenth, surprise, surprise, Bamenda in Cameroon. A report in Nature calculated that 400,000 premature deaths a year are caused by emissions from dirty shipping fuel. As a result the International Maritime Organization has mandated that all shipping must use higher quality fuels by 2020 though there are suspicions that shipping companies are installing equipment on ships to bypass the regulations. I didn’t know Volkswagen built ships’ engines?
On his blog, Bill Gates points out that electricity generation accounts for only 25 percent of greenhouse gas emissions, with the balance coming from agriculture (24%), manufacturing (21%), transport (14%) and buildings (6%). I’m not sure he looked at his own IT industry as an article in Nature Climate Change claims that carbon dioxide emissions from Bitcoin mining alone could be enough to increase global temperatures by two degrees Celsius within just a couple of decades.
Canadian scientists have recorded that the glaciers in the St Elias Mountains of the Yukon are melting faster than would be expected from climate warming. Climate change has been cited as the major reason that California is again being roiled by deadly forest fires. To make North American environmental matters even more complicated, New York’s attorney general has filed a lawsuit against Exxon Mobil asserting that the company defrauded shareholders by downplaying the business risk of climate change.
The European parliament has overwhelmingly backed a wide-ranging ban on single-use plastics in an effort to tackle pollution in seas, fields and waterways. According to the Bureau of International Recycling more than 270 million tonnes of waste are recycled worldwide each year as part of a US$ 200 billion a year industry but China has recently severely limited imports of raw recycling material. Research from the WWF calculates that human kind has killed 60% of mammals, birds, fish and reptiles since 1970.
People Change:
As though I haven’t already spoken enough about death and destruction, the OECD has warned that more than 2.4 million people in North America, Europe and Australia will die before 2050 as a result of antibiotic superbug infections unless firm action is taken.
Autonomous Electric Vehicles
Still on my deathly theme, researchers at University of Chicago and Rice University have concluded that the rise of ride-sharing services such as Uber and Lyft has increased traffic deaths in the USA by 2% to 3% since 2011, equivalent to as many as 1,100 fatalities a year.
The IEA, normally conservative on renewable energy and related topics, is predicting there will be more than one billion electric cars, half the total, on the road by 2040. Data released by the European Automobile Manufacturers Association show that third quarter 2018 sales of alternatively powered vehicles in Europe are up by almost 30 per cent while diesel sales are on the decline. The highest increase in sales was seen in battery electric vehicles, with a 37.9 per cent increase across the EU. Across the Atlantic, Canadian electric vehicle sales in the year to October were up 158 per cent on 2017, while American sales were up more than 100 per cent with Tesla taking the lion’s share. Numbers for the world’s biggest market, China, where more than 300 electric car companies are registered, are not yet available for the same period but are also likely to show growth in excess of 100 per cent.
To help boost the market growth, Volkwagen is investing € 30 billion in producing new electric vehicles by 2020 in Zwickau and Shanghai which have the performance of a Tesla but cost considerably less. United Kingdom electronics company Dyson plans to produce electric cars in Singapore. From 30th November 2018, Madrid will ban cars with internal combustion engines from the city’s roads during the day. And it’s not just electric cars that are taking off - Eviation is building the first of its all-electric passenger aircraft in France which will carry up to 9 passengers and have a range of up to 1,000 Kilometres.
Waymo has been given regulatory approval to operate driverless cars in California. Baidu, which has been testing self-driving technology in China and the USA, signed an agreement with Volvo and Ford to produce autonomous electric cars in China.
Mass Data Mining and Storage
On a non death defying note, the United Kingdom has introduced a tax on the turnover of global data companies such as Google and Facebook. India has compelled international credit card companies, who mostly fly under the data hoarding radar, to store data originating in India on servers in India and nowhere else. Let’s watch for Europe following suit.
Automation Based Unemployment
With the American economy booming and unemployment way down, talk about automation based unemployment has become muted recently. However I was struck by a comment by eVestment that there are nearly 13,000 security analysts employed in the USA in addition to thousands in investment banking despite the number of listed companies halving in ten years and that only 14% of US equity funds have performed better than the stock market average. You would think it wouldn’t take much artificial intelligence to just follow the market average and put them all out of business?
Increasing Inequality
Research by UBS and PWC concluded that billionaires made more money in 2017 than in any year in recorded history increasing their wealth by twenty per cent to US$ 8.9 trillion. Clearly they know something the investment analyst community are missing.
The new Italian government is planning to introduce a “citizens’ income programme” which is not unlike a basic income grant. The EU is dead against the Italian government’s budget which includes this measure.
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