Again, quickly, to respond to Richard Katz's stimulating questions (Sep 28):

RK: "Wind power depends on the lifetime of the turbines"

True. However, the very info quoted by RK shows that the lifetime (20-30) years equals or exceeds the duration of the FIT (20 years). What comes after 20 years is exceedingly cheap, with the plant being amortized. Also, please let's keep in mind that plant operation periods are subject to extension by regulatory means. This has been done for thermal, hydro, nuclear, etc. I don't see why this should not apply to renewables.

It is also true that biomass needs to gather waster products, etc. But this cost needs to be contextualized against other costs, which would alternatively be born by households (either as consumers or tax payers):
fossil fuel extraction, disposal and/or reprocessing of nuclear waste, carbon externalities, etc. A useful discussion can be had here once somebody provides some data?

RK: "Now, if we're going to cut down forests in Germany and elsewhere to burn them, the net effect on carbon emissions will be quite substantial"

Ok, i should re-emphasize here that i am skeptical of the "renewableness" of biomass and that i am no big expert on it. However:

The "often just wood and dung" argument is valid. India for instance had a "combined renewable and waste"
percentage in its total primary energy supply (electricity + transport + heat) of cca 42% in 1990 and cca 28% in 2006, and yes, that means mostly wood and dung (see IEA World Energy Balances for source). But we're not thinking of India here, or of powering the British Industrial Revolution, or anything of the sorts. Nobody i am familiar with is saying that the great big hope of renewables is to chop down all the forests and burn them and, since the forests are green, the energy we get out of that is gonna be green, too.

The idea about biomass is that there is a balance between harvesting and energy generation, and that a production cycle is created. Yes, there is combustion, ergo CO2, but that is offset by the fact that there is an equivalent amount of CO2 being re-absorbed into new biomass (wood, grass, algae, what have you) being produced for the next harvest. Hence, carbon neutrality. All of this requires very, very careful carbon accounting and very, very good governance, just as RK's source says: "Only biomass that is carefully chosen, grown responsibly, and efficiently converted into energy can reduce carbon and other emissions compared to fossil fuels."

Good accounting and good governance are thin on the ground these days, hence my skepticism. But, to allay concerns once more: No-one is seriously thinking about cutting down forests these days anymore. Here is the kind of stuff we are heading towards (TED Talks on
algae):

http://www.youtube.com/watch?v=X-HE4Hfa-OY

RK: "Gross business investment is 13% of GDP (nominal).
Most of that goes simply to replace worn-out and/or technologically obsolete buildings and equipment. What enables GDP to grow is the NET investment that adds to the size of the total capital stock."

Innocent macro question: So, if a utility retires a coal plant and replaces it with a wind farm, is that net or gross in terms of GDP accounting?

Maybe not so innocent question: I guess my question was more along the lines of how much of GDP large infrastructure projects take up? Things like Germany's highway system, or the nuclearization of France, or the Three Gorges Dam? That's more where i was aiming at.

RK: "Is this a disguised boondoggle?"

Oh, yes, absolutely. The FIT on solar is not a DPJ invention and has nothing to do with Fukushima. The Aso administration rolled it out in 2009. Fukushima Daiichi was a corruption-tainted nuclear power plant in a country full of corruption-tainted nuclear power plants, the Copenhagen conference was the wet dream of Green Parties everywhere, and you had to be a gas nutter to have even heard of the word "fracking". The reason why the LDP created it was because Japanese solar panel producers, who used to be kings of the world market, were having their lunch eaten by the Germans and the Chinese. The LDP FIT was, at 48 yen/kWh, actually 14% more expensive than the current one. All in the name of creating a domestic market.

Now that Fukushima has happened, the policy landscape has changed of course a whole lot, with anti-nuclear forces enjoying an unprecedented voice. One does wish that the government got its act together and demonstrated that it means business in terms of nuclear safety, and generally nuclear policy at large. Strictly from a CO2 point of view, Japan's power sector cannot be said to be heading in a good direction over the medium term.

Alex Luta.