Last month, our Green Minister of Energy approved the doubling of the grid tariff (a charge for network use that the grid manager charges to the electricity users). The reason for this increase is the massive investment that the grid manager wants to do in the next decade.
These investments are expected to cost around 7 billion euro over the next decade. A big part of the investments goes to a sea cable to Denmarkand and to the UK, also cables to Germany, France and the Netherlands. Another part of the investment is the strengthening of the backbone that brings the Denmark/UK/offshore electricity inland (Ventilus). So, these investments have directly to do with the energy transition.
These costs will be billed to the end users (families and industry). There was some protest against this increase from the energy watchdog, consumer associations and the industry, but the Minister pushes through (translated from Dutch):
Minister of Energy Tinne Van der Straeten (Flemish Green Party) is now pushing through. “The cost of doing nothing is many times higher,” she says. “We see that in the Netherlands, where the grid is congested and industry can no longer expand. The costs of global warming also amount to a multiple of the investment costs, which translate into extra employment, security of supply and more cheap energy”.
I was not familiar with the situation in the Netherlands. It looks like she claims that the Dutch grid is congested and industry in the Netherlands can’t expand anymore. That looks like a strong claim. Looking it up, there are two Dutch provinces (Brabant and Limburg, both along the Belgian border) that don’t allow new heavy electricity users to connect to the electricity grid because the grid can’t handle it anymore, they will have to wait until that part of the grid is strengthened. The reason for this congestion is the rapid growth of heat pumps, charging stations, new companies and the electrification of the industry.
Interesting is that she now seems to admit that the energy bill will increase because of the transition, but that it will be lower relative to other policies. She however sticks to the story that alternative energy is “cheap”.
That the grid tariff doubles doesn’t mean that the electricity price is going to double. The grid tariff is currently 2% of the electricity price, which will translate in a increase of 40 euro for families and 5+ million euro for industry each year for the next ten years. That is relatively small, but it is only the beginning and a small part of the real cost of alternative energy. This is only the investment for extra interconnection and the backbone to bring the imported electricity inland. There is also other infrastructure that was never intended to be used in an intermittent system. This reminds me of a street in a nearby village in which a couple years ago experienced surge issues around noon when solar panels produced a lot of electricity and ended up placing a €250,000 battery to control the frequency in that street. That is only one street in one small village, there are undoubtedly other neighborhoods that have such old, not compatible infrastructure that need to be strengthened, renewed or get assistance from a big battery when the share of intermittent energy becomes ever larger.
Not only transmission and frequency control costs will increase the cost of alternative energy. Although our Minister in the past claimed that solar and wind getting cheaper, they still need subsidies to survive. They also need backup, which is envisioned by our Minister as gas fired power plants, which now also need subsidies to make economical sense. Probably giving rise to a carbon tax. She is also looking into subsidies for batteries. and dreams of an energy transition based on hydrogen. This while she is dismantling most of our nuclear infrastructure, which is currently our cheapest form of energy production we have.
There are many costs that she seems to ignore, therefor she is able to keep up the “renewable energy is cheap” narrative. Although the price impact for the investments is lower than I expected, I don’t think that the energy she proposes will come anywhere close to cheap.
via Trust, yet verify
June 24, 2023 at 04:48AM
Iowa Climate Science Education 