2015 Nobel laureate Angus Deaton

A nice summary on this year’s recipient of Nobel Prize in Economics, Angus Deaton.

The press release on “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2015”

To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices. More than anyone else, Angus Deaton has enhanced this understanding. By linking detailed individual choices and aggregate outcomes, his research has helped transform the fields of microeconomics, macroeconomics, and development economics.

The work for which Deaton is now being honored revolves around three central questions:

  • How do consumers distribute their spending among different goods?…
  • How much of society’s income is spent and how much is saved?…
  • How do we best measure and analyze welfare and poverty?…

 

I follow the Knowledge Problem blog which has  nice short article recommending Deaton’s accessible work, The Great Escape as well as links to podcasts with Deaton.

For videos…

…Deaton’s work sits with the demographic analyses and data visualization of Hans Rosling (if you haven’t seen his 200 countries in 200 yearsvideo, put down everything right now and watch it; his TED talk about the impact of the washing machine is guaranteed to bring tears to the eyes of at least this unsentimental economist). It also complements Joel Mokyr’s economic history of innovation and technological change as factors enabling economic growth.

 

2015 Nobel laureate Angus Deaton | Knowledge Problem

Ontario’s electricity wonderland: furious and furiouser

I just left a comment on an article at the Globe and Mail with the topic of importing power to Ontario from Labrador- which I’ll post below.

Yesterday the National Post broke a story about Ontario looking to import electricity from Labrador. There are lots of ugly aspects to the tale, and some interesting ones – but it’d require a lot of time to examine a “promise of cheaper, cleaner power [that] is, in effect, nothing more than a distraction, a promise that will never be fulfilled” – as Terence Corcoran aptly describes it.

My comment in the Globe criticized the Minister of Energy’s nonsense spin on saving money by not utilizing the natural gas fueled power plants contracted since the election of the Liberal party in 2003. If you believe Mr. Ciarelli is an honest man, it’s not that he doesn’t understand the system inherited, but that he doesn’t know the system his government created.

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Adams and McKitrick: How green energy is fleecing Ontario electricity consumers

Tom Adams and Ross McKitrick have a column in the Financial Post which promotes their study being released tomorrow by the Fraser Institute.

This promises to be a report I’ll appreciate, having noted many times the systemic costs of growing intermittent renewables (very recently here)

How green energy is fleecing Ontario electricity consumers 

Green industry advocates, including the consulting firm Power Advisory and advocacy group Environmental Defense, have added up the direct payments to new renewable generators, and concluded that since those costs are relatively small, the impact of renewables on the total cost of power is likewise small.

However, such analyses ignore the indirect costs that arise from the way renewables interact with the rest of the power system. Adding renewable generating capacity triggers changes throughout the system that multiply costs for consumers through a mechanism called the Global Adjustment. Our new study, released Wednesday by the Fraser Institute, quantifies the impacts of different types of new generators on the Global Adjustment. The analysis pinpoints what causes the raw deal for consumers.

…Our analysis unpacking the costs of different types of generation shows that the consumer impact of new renewables substantially exceeds the direct payments to those generators by as much as 3 to 1. And renewables are a big part of the problem: Wind and solar systems provided less than 4% of Ontario’s power in 2013 but accounted for 20% of the commodity cost paid by Ontarians.

The entire article can be read, and commented on, at the Financial Post

 

Cost of energy in EU according to Ecofys

“…note how the ground keeps shifting, but always in such a way as to inflate costs for nuclear power and fossil fuels.”

Jani-Petri Martikainen’s blog may lead to additional reading. Hopefully that includes a recent post of mine commenting on the same Ecofys study: Levlised Cost confusion disguises rate impact of intermittent renewables

PassiiviIdentiteetti

Recently a report on energy costs prepared for EU commission by the consulting company Ecofys crossed the news threshold in many places. Usually it has been reported as being “the EU report”, but EU commision states “The views have not been adopted or in any way approved by the European Commission and should not be relied upon as a statement of the European Commission’s views. The European Commission does not guarantee the accuracy of the information given in the studies, nor does it accept responsibility for any use made thereof.” So the report has not been “endorsed” by EU commision (although paying Ecofys for the report is bad enough). Ecofys did the work on WWF bioenergy-heavy renewables-only energy vision and is widely linked and quoted by environmentalists in Europe.

Following quote from WWF report captures quite well, why I am not a fan. “Ecofys estimates that…

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Wrong way round

A truly independent local paper is now a rarity in Ontario.

The Wellington Times is the best I know of, so I was well flattered to see my name, and original content blog, in Rick Conroy’s Wrong Way Round:

Bit by bit, the Ontario government is recognizing the futility of its renewable energy strategy. Still, it can’t help but throw more public tax dollars at developers eager to cash in at our expense.

This week, the Independent Electricity System Operator (IESO) announced it was letting five contracts worth a total of $42 million to develop electricity storage technologies. The money will be used to develop a dozen demonstration projects around the province designed to capture and release energy— schemes that use batteries, hydrogen, flywheels and even bricks. Yes, bricks.

The problem is that none of these technologies work—certainly not on a scale sufficient to serve a regional electricity grid. Nor is Ontario the first to dabble in the search for this Holy Grail. Every jurisdiction that has dabbled in intermittent energy sources such as wind and solar has grappled with the same dilemma; what to do when the sun doesn’t shine and wind doesn’t blow?

It would have been wiser and more productive had these jurisdictions pooled their money to solve this problem before each erected forests of industrial wind turbines and covered vast tracts of land with solar panels. This may seem obvious with hindsight—except I, and many others, made this same point in in 2006.

Of course, it is far too simplistic to limit the challenge of intermittent electricity sources to its inherent unpredictability. The bigger issue is that it messes with the entire system— not just with the wires and transformers, but with the way we buy and sell electricity. How we match demand with supply.

On most days, we generate enough electricity to serve the province from our hydro dams and our nuclear power stations. Yet wind turbines and solar panels continue to push useless electricity into the grid. The excess must be dumped or the entire system is put at risk. It is why we spend about a billion dollars each year paying Ontario’s neighbours to take our energy. Now we also pay wind and solar energy producers to disconnect themselves from the grid.

Scott Luft does a great job on his blog Cold Air chronicling and describing the challenges that intermittent electricity wreaks upon Ontario’s system. He makes the point, backed by closely observed data, that the IESO has effectively lost its bearings.

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Aldyen Donnelly: The indispensable report

This old post by Aldyen Donnelly informs on the foolishness of regressive energy taxation… a lesson ignored in Ontario.

regressive
From the cited post by Aldyen Donnelly, the “Energy Consumption Taxes” line should be a textbook example of regressive taxation

Two articles from 2011 were referenced by Edward Keenan on Twitter (to which I responded), one directly, by Stephen Gordon (McGill), and the second is an earlier article by Mike Moffat (Western), which I presume is The ’99 per cent’ don’t really want to fix inequality.

Nowhere are “energy consumption taxes” shown to be progressive, by any coherent usage of the term.  That doesn’t, in itself, make the taxes a bad idea, but Aldyen Donnelly has a strong argument that data does shows taxing this necessity to be a counter-productive action.

Energy Probe

(May 18, 2011) I attach a copy of one of a series of Xcel workbooks that, since 1999, the UK Treasury publishes as part of a set of “Pre-Budget” documents.  It shows the estimated impact of all government taxes and transfers/benefits (cash and in-kind) on working families, by income decile.  The Treasury also publishes a similar analysis for retired and not working families, and a workbook that combines all families.

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Ontario electricity costs ‘breaking’ province’s manufacturing sector

The province has a huge issue there getting those [electricity] costs down. That’s an input cost breaking some of our manufacturers.”

Goodyear added manufacturers are telling him electricity is costing ‘thousands and thousands a month more than it did even last year.’

“It’s difficult to be competitive when you have those types of exorbitant rates,” said Goodyear said.

Hydro One chair of the board of directors Sandra Pupatello warned the province faces a difficult decade of challenges in the energy sector combating falling American electricity prices.