China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind

[Wombat + 1,028]

On 3/19/2020 at 8:44 PM, Tom Kirkman said:

"Renewable" Energy simply cannot survive without government subsidies (aka FREE MONEY).  Especially when competing against exceedingly low oil & gas prices. 

"Renewable" energy train wreck coming soon to China.  Far left Greenies can cry all they want.  Let markets decide if the Green New Deal type enforced Socialism is feasible (it's not).

 

China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind

Things might be going from bad to worse for Elon Musk and his merry band of alternative energy cultists in China. While Musk is currently in the midst of criticism from the Chinese government related to a bait and switch he is pulling on vehicle hardware (while blaming the coronavirus), the Chinese government appears to be set on slashing additional alternative energy subsidies in 2020. 

China is going to cut its budget for new solar power plants in half this year and plans on completely ending handouts for offshore wind farms, according to Caixin. 

It is the latest in a string of moves by the Chinese government to cut support for renewable energy. The attitude has shifted in recent years as manufacturing costs have dropped. The government now seems focused on getting renewable energy to stand on its own.   ...

 

I disagree Tom, looks to me like fossil fuels can no longer stand on their own? Did u know there is a Chinese solar company that just announced a ramp-up in production over next 3 years equivalent to 50% of global supply? They not mucking around.

[Wombat + 1,028]

On 3/20/2020 at 9:06 AM, markslawson said:

What oil bailouts are you referring to? What subsidies? Usually when I asked activists this their replies show that they have confused standard tax concessions - deductions for exploration expenses and so on which oil companies can claim - with subsidies. If you could point out what you're relying on I'll review it for you. 

At least the renewable industry creates sustainable jobs. Shale may have created temporary jobs and brought taxes to certain states, but no profit over many years = no corporate tax for the Feds?

[Wombat + 1,028]

On 3/22/2020 at 12:33 PM, Keith boyd said:

Ev's not paying road tax is a subsidy. The tax on gas and diesel pays for the roads. It is essentially a mileage tax on roads. The bigger the vehicle the more fuel it uses the more tax you pay per mile. It's actually an incredibly efficient and fair way to collect road taxes. Except that EV's dont pay any road tax while using the roads. If everything switches over to electric who pays for the roads?

US "gas tax" has not increased for nearly 30 years and does not come close to paying for roads anymore. That is why u have such enormous "infrastructure deficit"?

[Douglas Buckland + 6,308]

On 3/26/2020 at 2:07 AM, Mark Potochnik said:

Guess what? Renewables are getting so cheap no government funding needed.

Your source, please.

[Douglas Buckland + 6,308]

13 minutes ago, Wombat said:

US "gas tax" has not increased for nearly 30 years and does not come close to paying for roads anymore. That is why u have such enormous "infrastructure deficit"?

Bullshit...

[Wombat + 1,028]

On 3/31/2020 at 2:05 PM, footeab@yahoo.com said:

My #1 guess is that you are not from the USA.  USA is national energy secure for the next ~200 years(assuming only easily accessable/good coal) and always has been except there was never political will to use Coal-->Methanol, and build more nuclear reactors.

#2 guess is that you are from a country that is NOT energy secure.  You are 100% correct: In this scenario, renewables are a good supplement. If, and only if, you have a grid which can store energy.  Sorry, there is no such energy storage device other than pumped hydro storage currently.  Even the largest batteries in the world are only economically viable for ripple currents in even the highest cost energy producers. 

The real answer to the renewables, national security, for ALL nations(irregardless of how many hydrocarbons a nation has), is energy storage, not installation of wind/solar.  Solve the energy storage problem first, and then the types of energy, even geothermal, become viable.  No, you will not have low cost of living, but you will be living.  Not 100% dependent on outside powers. 

And cheap storage is on it's way! Only 2 years to go

[Wombat + 1,028]

On 4/1/2020 at 5:34 AM, NickW said:

Ok if taxes were added before 'going green' I shall refine the question.

What was the change in price of fossil fuel derived electricity over the same period? 

Good question! Here in Australia, electricity prices almost TRIPLED, despite fact we get 76% of our electricity from local coal, and most of the rest from gas and hydro  That is why I have solar panels... much cheaper!

[footeab@yahoo.com + 2,132]

2 hours ago, Wombat said:

And cheap storage is on it's way! Only 2 years to go

Any my flying car I was promised is still lost in the mail...

[markslawson + 1,042]

3 hours ago, Wombat said:

At least the renewable industry creates sustainable jobs. Shale may have created temporary jobs and brought taxes to certain states, but no profit over many years = no corporate tax for the Feds?

Wombat - your argument is thoroughly confused and confusing. The point was that the renewables industry often tries to claim that tax concessions are subsidies when clearly they are not.. you can't win on that point so you're claiming the moral high ground. Well, okay, whatever. However, your point about no profits for shale companies further illustrates the lack of subsides. You have to make a profit to claim a concession and, in any case, the lack of profits does not much to do with the shale industry.. in the US companies in certain fields, notably high tech, are usually run at no profits or losses for years. The idea is to increase the share price, not profits..  There are no shale companies as such in Australia - its all conventional or coal seam gas here - but oil and gas companies pay the petroleum resources rent tax (if gas doesn't pay PRRT it would pay something similar).. 

[Wombat + 1,028]

1 hour ago, footeab@yahoo.com said:

Any my flying car I was promised is still lost in the mail...

Actually, the flying car is here, just that nobody bothers to buy one. Not practical coz they only good to avoid city traffic, but u can't have hundreds of thousands of flying cars in a city?

[Wombat + 1,028]

1 hour ago, markslawson said:

Wombat - your argument is thoroughly confused and confusing. The point was that the renewables industry often tries to claim that tax concessions are subsidies when clearly they are not.. you can't win on that point so you're claiming the moral high ground. Well, okay, whatever. However, your point about no profits for shale companies further illustrates the lack of subsides. You have to make a profit to claim a concession and, in any case, the lack of profits does not much to do with the shale industry.. in the US companies in certain fields, notably high tech, are usually run at no profits or losses for years. The idea is to increase the share price, not profits..  There are no shale companies as such in Australia - its all conventional or coal seam gas here - but oil and gas companies pay the petroleum resources rent tax (if gas doesn't pay PRRT it would pay something similar).. 

U clearly do not understand how our PRRT works. It is essentially an "investment tax credit". Our LNG companies pay NO TAX on their operating profits until their Capex has been paid off. Only then does PRRT get added to normal company tax. That is why we had so much investment in the sector. I don't have a problem with that. I think we should be exporting as much LNG, as well as solar and Hydrogen into Asia as possible. I think u will find that the tax concessions work in a similar way in US. And yes, they are a subsidy in the sense that they nullify any royalties for a very long time. The mining industry does not receive such favourable tax treatment. Indeed, the dopey Labour govt tried to make the MRRT apply to EXISTING mines, not just new ones, effectively a super-tax on mining which would have cooked our golden goose.

[Hotone + 412]

2 hours ago, markslawson said:

.. in the US companies in certain fields, notably high tech, are usually run at no profits or losses for years. The idea is to increase the share price, not profits..  

It's not just in the US, and some of the big names will be going out of business ... Wework, Airbnb, OYO, Uber, etc. .. not sure how they can survive without profits and now a slowdown in business. The likes of OFO and other bike sharing companies in China are almost dead

[Douglas Buckland + 6,308]

7 hours ago, Wombat said:

And cheap storage is on it's way! Only 2 years to go

Ziplok bags don’t count...

[markslawson + 1,042]

13 hours ago, Hotone said:

It's not just in the US, and some of the big names will be going out of business ... Wework, Airbnb, OYO, Uber, etc. .. not sure how they can survive without profits and now a slowdown in business. The likes of OFO and other bike sharing companies in China are almost dead

The current crisis is quite a different matter, but perhaps I was overstating when I said without profits.. with minimal profits perhaps.. Amazon's profits have always been miniscule in relation to its size but it still attracts investors because its share price always increased - or at least did until recently. However, I agree about the current crisis, its a huge problem.. 

[markslawson + 1,042]

14 hours ago, Wombat said:

U clearly do not understand how our PRRT works. It is essentially an "investment tax credit". Our LNG companies pay NO TAX on their operating profits until their Capex has been paid off.

Actually that's wrong. I strongly suspect you'd never heard of the PRRT before I mentioned it then glanced at a green industry source, which was propaganda. Here is a link to a Deloitte paper on the issue https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Energy-and-Resources/gx-er-oilandgas-australia.pdf

Look at page five which gives the actual formula for calculating the tax.. companies have to pay out 40 per cent of the NET MARGIN on sale of the gas.. financing costs enter into it (look at the list down the page) but capex doesn't.. there's nothing about depreciation in the list.. exploration costs, in case you're wondering, is only a small part of overall vast expenditure on such projects..  in other words the government gets its share.. the PRRT actually operates more like a royalty. That was interesting because I wasn't fully aware of just how the tax operated but you should still check your sources before condemning me. 

[Wombat + 1,028]

8 hours ago, markslawson said:

Actually that's wrong. I strongly suspect you'd never heard of the PRRT before I mentioned it then glanced at a green industry source, which was propaganda. Here is a link to a Deloitte paper on the issue https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Energy-and-Resources/gx-er-oilandgas-australia.pdf

Look at page five which gives the actual formula for calculating the tax.. companies have to pay out 40 per cent of the NET MARGIN on sale of the gas.. financing costs enter into it (look at the list down the page) but capex doesn't.. there's nothing about depreciation in the list.. exploration costs, in case you're wondering, is only a small part of overall vast expenditure on such projects..  in other words the government gets its share.. the PRRT actually operates more like a royalty. That was interesting because I wasn't fully aware of just how the tax operated but you should still check your sources before condemning me. 

Read Page 2: "Development costs". That is what I meant, not on-going capex. If you read the whole thing, it is clearly meant to bamboozle the reader. To me, development cost = capex (or at least 70% of it over the life of the project), and it states that financing costs are not deductible. I promise you, being able to write off the development cost is what makes the whole project viable and is the reason that PRRT is a very long-term proposition when it comes to serious revenue for the govt. If u don't believe me, just ask deloitte to explain it to you? Basically, because the initial outlay is so large, and the financing cost so high in the first 5-10 years (depending on oil price), it simply takes a long time to generate the "super-profits" to which the PRRT is applied. That is why the Greenies (and Labour) upset, they thought all their prayers had come at once and got narky when the oil price fell and they realised there was no bounty to be had in order to sustain their socialist dreams. Hope that helps

[NessyOil + 5]

On 3/19/2020 at 4:44 AM, Tom Kirkman said:

"Renewable" Energy simply cannot survive without government subsidies (aka FREE MONEY).  Especially when competing against exceedingly low oil & gas prices. 

"Renewable" energy train wreck coming soon to China.  Far left Greenies can cry all they want.  Let markets decide if the Green New Deal type enforced Socialism is feasible (it's not).

 

China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind

Things might be going from bad to worse for Elon Musk and his merry band of alternative energy cultists in China. While Musk is currently in the midst of criticism from the Chinese government related to a bait and switch he is pulling on vehicle hardware (while blaming the coronavirus), the Chinese government appears to be set on slashing additional alternative energy subsidies in 2020. 

China is going to cut its budget for new solar power plants in half this year and plans on completely ending handouts for offshore wind farms, according to Caixin. 

It is the latest in a string of moves by the Chinese government to cut support for renewable energy. The attitude has shifted in recent years as manufacturing costs have dropped. The government now seems focused on getting renewable energy to stand on its own.   ...

 

The free market will make renewable work.   The innovations to make it viable without government incentives have already occur.   All that O&G money that was supposed to come available via debt and share offerings,   will now be shifted to renewable energy.   Peak oil happened in Feb 2020 and this shift in investment will only increase its decline in usage 

[Tom Kirkman + 8,860]

44 minutes ago, NessyOil said:

Peak oil happened in Feb 2020 and this shift in investment will only increase its decline in usage 

Where do you get the time frame of Feb 2020 for peak oil?

I've been hearing about peak oil for decades.

[John Foote + 1,135]

On 4/4/2020 at 11:06 PM, Douglas Buckland said:

Bullshit...

In Texas the money from excise fuel taxes is up some over 20 or so years, and down slightly if you account for the value of money. During the same time the population and has gone up 40%. So yeah, the roads are in poor shape then when I bought house here in '87. 

From what I personally see, toll roads seem to be the way forward in Texas. Not a fan, but better than nothing. Hey, and I can drive 90 mph to work and be legal doing it. Shame I only have 2 mile opportunity, which I typically byass to save 89 cents (each way). 

Diesel of course, the big rigs tear up the road while no amount of driving on your hog is going to stress the road. 

Could we even afford to have trucks paying their share of the burden? IMHO no. We all benefit from a transportation/logistics system that is so, so, much better than I've seen in Japan, Europe, of the Middle East. 

The electric vehicle are another issue. They aren't paying a dime in gas/diesel road excise taxes, and that has to be fixed as they become a higher proportion of the folks on the road. They do at least pay tolls.

https://comptroller.texas.gov/economy/fiscal-notes/2019/jul/motor-fuels-taxes.php

 

[markslawson + 1,042]

15 hours ago, Wombat said:

I promise you, being able to write off the development cost is what makes the whole project viable and is the reason that PRRT is a very long-term proposition when it comes to serious revenue for the govt.

So not only are you completely unabashed for getting the original reference to capex wrong you've changed the argument and now insist you really mean development costs .. I have news for you. Being able to write off development costs make ALL projects viable, not just oil and gas. They are allowed to do so under tax laws.. This is an ATO statement on how the PRRT works. As the Deloitte report notes its a profits based tax. The fact that they can write off costs is pretty much how all other development projects work. The company's concerned are being treated just like everyone else.

Now Wombat, mate, that's it. It's good that at least you looked at the Deloitte report and are better informed than you were. But I suggest you make an effort to acquaint yourself with the Australian tax system before challenging me. Leave it with you.. 

Petroleum resource rent tax (PRRT) revenues are highly variable due to commodity and project development cycles. This means that PRRT revenue is particularly sensitive to commodity prices, exchange rates and development costs. Revenues are further affected by key design features of the PRRT. The tax will only arise when a project has:

• recovered all eligible outlays associated with the project, including eligible exploration expenditure transferred from other projects
• achieved a threshold rate of return on the outlays.

Additionally, resource tax expenditure such as state, territory and federal royalties and excise are deductible in order to prevent double taxation. This means that projects tend to pay no PRRT for some years even after production has commenced.

As a result, current PRRT collections arise mainly from more mature projects that have recovered all eligible outlays, such as the Bass Strait project. A number of other Australian gas and petroleum projects – such as Gorgon – have only recently commenced production. They would not be expected to pay PRRT for some time because of the significant development outlays which must first be recouped.

Note that amounts reported in this estimate are rounded to the nearest $ million.

Table 1 shows the tax collections for PRRT for 2013–14 to 2016–17 including the number of entities paying PRRT and the amount paid.

Table 1: Number of entities paying PRRT and amounts paid from 2013–14 to 2016–17

Financial year	Entities paying PRRT (no.)	PRRT payable ($m)
2013–14	12	1,827
2014–15	13	1,244
2015–16	9	944
2016–17	14	1,008

Note: The variation in the PRRT paid compared to Taxation Statistics and the Report of Entity Tax Information is due to data being extracted at different points in time.

[Dan Warnick + 6,100]

On 4/5/2020 at 4:54 PM, Hotone said:

It's not just in the US, and some of the big names will be going out of business ... Wework, Airbnb, OYO, Uber, etc. .. not sure how they can survive without profits and now a slowdown in business. The likes of OFO and other bike sharing companies in China are almost dead

Bike sharing?  Anybody ever share a toolbox in a production area?  Nobody takes care of it, you're always having to replace missing or broken tools; in essence, it doesn't work and costs lots of money to maintain.  Even cops or cab drivers will tell you that sharing cruisers and cabs doesn't work either.  It really seems like these services were dreamed up by unicorns that thought everyone is like them, or should be.

As for the Ubers of the world, I think it should be obvious that you cannot maintain quality, safety or profits when everyone is independent AND using personal equipment to provide the service.  Might work for a percentage, but I don't see long term profits as sustainable.  I don't follow Uber or others, but I recall they got huge bucks when they went public and declared profits through creative accounting for a long time.  Fact is the business model doesn't make sense on a large scale.

Your mileage may vary.....