Category Archives: Global – Agencies

G8, G20, United Nations, Consumer Goods Forum (CGF), GS1, World Trade Organization (WTO), World Health Organization (WHO), Center for Disease Control (CDC), International Standards Organization (ISO).

UHVDC and China

Credit: Economist Article about UHVDC and China

A greener grid
China’s embrace of a new electricity-transmission technology holds lessons for others
The case for high-voltage direct-current connectors
Jan 14th 2017

YOU cannot negotiate with nature. From the offshore wind farms of the North Sea to the solar panels glittering in the Atacama desert, renewable energy is often generated in places far from the cities and industrial centres that consume it. To boost renewables and drive down carbon-dioxide emissions, a way must be found to send energy over long distances efficiently.

The technology already exists (see article). Most electricity is transmitted today as alternating current (AC), which works well over short and medium distances. But transmission over long distances requires very high voltages, which can be tricky for AC systems. Ultra-high-voltage direct-current (UHVDC) connectors are better suited to such spans. These high-capacity links not only make the grid greener, but also make it more stable by balancing supply. The same UHVDC links that send power from distant hydroelectric plants, say, can be run in reverse when their output is not needed, pumping water back above the turbines.

Boosters of UHVDC lines envisage a supergrid capable of moving energy around the planet. That is wildly premature. But one country has grasped the potential of these high-capacity links. State Grid, China’s state-owned electricity utility, is halfway through a plan to spend $88bn on UHVDC lines between 2009 and 2020. It wants 23 lines in operation by 2030.

That China has gone furthest in this direction is no surprise. From railways to cities, China’s appetite for big infrastructure projects is legendary (see article). China’s deepest wells of renewable energy are remote—think of the sun-baked Gobi desert, the windswept plains of Xinjiang and the mountain ranges of Tibet where rivers drop precipitously. Concerns over pollution give the government an additional incentive to locate coal-fired plants away from population centres. But its embrace of the technology holds two big lessons for others. The first is a demonstration effect. China shows that UHVDC lines can be built on a massive scale. The largest, already under construction, will have the capacity to power Greater London almost three times over, and will span more than 3,000km.

The second lesson concerns the co-ordination problems that come with long-distance transmission. UHVDCs are as much about balancing interests as grids. The costs of construction are hefty. Utilities that already sell electricity at high prices are unlikely to welcome competition from suppliers of renewable energy; consumers in renewables-rich areas who buy electricity at low prices may balk at the idea of paying more because power is being exported elsewhere. Reconciling such interests is easier the fewer the utilities involved—and in China, State Grid has a monopoly.

That suggests it will be simpler for some countries than others to follow China’s lead. Developing economies that lack an established electricity infrastructure have an advantage. Solar farms on Africa’s plains and hydroplants on its powerful rivers can use UHVDC lines to get energy to growing cities. India has two lines on the drawing-board, and should have more.

Things are more complicated in the rich world. Europe’s utilities work pretty well together but a cross-border UHVDC grid will require a harmonised regulatory framework. America is the biggest anomaly. It is a continental-sized economy with the wherewithal to finance UHVDCs. It is also horribly fragmented. There are 3,000 utilities, each focused on supplying power to its own customers. Consumers a few states away are not a priority, no matter how much sense it might make to send them electricity. A scheme to connect the three regional grids in America is stuck. The only way that America will create a green national grid will be if the federal government throws its weight behind it.

Live wire
Building a UHVDC network does not solve every energy problem. Security of supply remains an issue, even within national borders: any attacker who wants to disrupt the electricity supply to China’s east coast will soon have a 3,000km-long cable to strike. Other routes to a cleaner grid are possible, such as distributed solar power and battery storage. But to bring about a zero-carbon grid, UHVDC lines will play a role. China has its foot on the gas. Others should follow.
This article appeared in the Leaders section of the print edition under the headline “A greener grid”

Africa Grid lags economic growth

New York Times reports…and here is the essence:

Nigeria’s leaders have promised a stable power supply since the end of military rule in 1999, spending about $20 billion and dismantling the state National Electric Power Authority, better known as N.E.P.A. — and widely derided as “Never Expect Power Always.”

Yet the country’s power generating capacity has remained virtually unchanged, about six gigawatts for a country of 170 million. The United States, with 310 million people, has a capacity of more than 1,000 gigawatts

—————–

Here is what keeps hope alive:

Post on Elon Musk and his powerwall factory

Note Musk is in record that his real vision is to sell battery factories….like the factory he is building in Nevada.

—————–

For Many in Africa, Lack of Electricity Is Barrier to Growth

JULY 1, 2015

JOHANNESBURG — In the darkened and chilly parking lot of a mall, a suburban family huddling around a shopping cart shared a snack on a Friday evening out. After finding their favorite restaurant closed because of a blackout, Buhle Ngwenya, with her two sons and two nephews, settled for meat pies from one of the few stores open in the mall.

“It’s like death, this load shedding,” Ms. Ngwenya, 45, said, referring to the blackouts imposed by South Africa’s state utility to prevent a collapse of the national electricity grid.

With winter here in South Africa, the worst blackouts in years are plunging residents into darkness in poor townships and wealthy suburbs alike. The cutoffs have dampened South Africa’s economy, Africa’s second biggest, and are expected to continue for another two to three years.

Despite a decade of strong economic expansion, sub-Saharan Africa is still far behind in its ability to generate something fundamental to its future — electricity — hampering growth and frustrating its ambitions to catch up with the rest of the world.

All of sub-Saharan Africa’s power generating capacity amounts to less than South Korea’s, and a quarter of it is unproductive at any given moment because of the continent’s aging infrastructure. The World Bank estimates that blackouts alone cut down the gross domestic products of sub-Saharan countries by 2.1 percent.

The crippling effect on sub-Saharan Africa was recently on display in Nigeria, which overtook South Africa as the continent’s biggest economy last year.

Nigeria’s electrical grid churns out so little power that the country mostly runs on private generators. So when a fuel shortage struck this spring, a national crisis quickly followed, disrupting cellphone service, temporarily closing bank branches and grounding airplanes.

The power shortages and blackouts have cast a harsh light on elected officials, causing rising anger among voters for whom reliable electricity was supposed to be a dividend of democracy and economic growth.

Experts say that the appointment of politically connected officials with little industry expertise at the South African state utility, Eskom, has led to mismanagement just as it has at other state-owned enterprises.

“It’s not only a symbol of failure when the lights go off,” said Anton Eberhard, an energy expert and a professor of management at the University of Cape Town. “It’s experienced directly by people. If you’re about to cook or if your child is studying for an exam the next day and your lights go off, people feel this very directly. There is a very concrete and dramatic expression of failure.”

The demand for power in Africa has become a major international issue. China has taken the lead in financing many power projects across the continent — mostly hydroelectric dams, but also solar power plants and wind farms. Private companies from Asia, the United States and Europe are also supplying power to an increasing number of countries.

China has taken the lead in financing many power projects across the continent, and independent power producers are now supplying some countries with electricity.

President Obama, in a visit to Africa two years ago, highlighted the importance of improving the continent’s power supply with a $7 billion initiative called Power Africa. The American government, partly through entities like the Millennium Challenge Corporation, is focusing on improving the electricity infrastructure in several countries, including Ghana, Malawi and Tanzania.

But investments and changes in the electricity sector on the continent have yet to yield significant gains, and experts predict that it will take decades before sub-Saharan Africa enjoys universal access to electricity.

In his inaugural address last month, Nigeria’s new president, Muhammadu Buhari, said that his nation’s attempts to overhaul its electricity sector “have only brought darkness, frustration, misery and resignation among Nigerians.” He singled out unreliable power service as the biggest drag on his country’s economy.

Nigeria’s leaders have promised a stable power supply since the end of military rule in 1999, spending about $20 billion and dismantling the state National Electric Power Authority, better known as N.E.P.A. — and widely derided as “Never Expect Power Always.”

Yet the country’s power generating capacity has remained virtually unchanged, about six gigawatts for a country of 170 million. The United States, with 310 million people, has a capacity of more than 1,000 gigawatts.

“Most companies don’t have four hours of power a day from the national grid,” said Akpan Ekpo, the director general of the West African Institute for Financial and Economic Management in Lagos, Nigeria’s commercial capital. “If they do, they’re lucky.”

Most of the $20 billion spent to overhaul the power sector is believed to have gone into the pockets of corrupt officials, Mr. Ekpo said.

“With the advent of democracy, we were promised constant power, or at least improved power,” he added. “But much to our surprise, things have only gotten worse. In some middle-class parts of Lagos, people are lucky if they now get 30 minutes of power a day.”

Yet the country’s power generating capacity has remained virtually unchanged, about six gigawatts for a country of 170 million. The United States, with 310 million people, has a capacity of more than 1,000 gigawatts.
“Most companies don’t have four hours of power a day from the national grid,” said Akpan Ekpo, the director general of the West African Institute for Financial and Economic Management in Lagos, Nigeria’s commercial capital. “If they do, they’re lucky.”
Most of the $20 billion spent to overhaul the power sector is believed to have gone into the pockets of corrupt officials, Mr. Ekpo said.
“With the advent of democracy, we were promised constant power, or at least improved power,” he added. “But much to our surprise, things have only gotten worse. In some middle-class parts of Lagos, people are lucky if they now get 30 minutes of power a day.”
South Africa’s recent history of electrification is more complicated, and it has been the subject of fierce debate as the current blackout crisis has dragged on for several months.
In the last years of apartheid, before a democratic government was elected in 1994, electricity reached only a third of South African households, few of them black.
Under the African National Congress — whose leaders have governed ever since, often promising free electricity and other services as part of the nation’s new democracy — 85 percent of households now have electricity, a remarkable accomplishment by any standard.
President Jacob Zuma has forcefully rejected any blame for the energy crisis. The strain on the grid, he said, resulted from the burden of bringing light to millions of black households without power under white-minority rule.
“It is a problem of apartheid, which we are resolving,” he said this year.
But energy experts say that these households, many of them low-income, consume little electricity. Instead, they said, the shortages result from frequent breakdowns at aging plants and, most critically, the delayed construction of two new facilities.
As far back as 1998, a government report warned that without new capacity, the country would face serious power shortages by 2007. A year later, in 2008, South Africa suffered its first rolling blackouts.
South Africa, which has the continent’s only nuclear power plant, has around half of sub-Saharan Africa’s power generating capacity, roughly 44 gigawatts. Still, the power cuts contributed to a recent drop in economic growth and a spike in unemployment to 26.4 percent, the worst level in a dozen years.
The rolling blackouts have affected everyone from giant gold mining companies and manufacturers to small businesses and individuals.
South Africans are now buying up generators, rechargeable lights and gas burners. They plan their days and evenings around scheduled blackouts by the utility. Dominating South Africa’s list of popular app downloads are ones that alert smartphone users to the impending start of a cutoff in their neighborhood or the risk of one as load shedding across the nation increases from Stage 1 to Stage 2 or Stage 3.
To Ms. Ngwenya, who was sharing meat pies with her family in the parking lot, load shedding was not only about electricity. She blamed the African National Congress, the party that liberated South Africa and has steered its course ever since.
“I always supported the A.N.C.,” said Ms. Ngwenya, who grew up in Soweto, a black township outside Johannesburg, but now lives in a wealthy suburb. “However, when it comes to load shedding, I don’t know. It’s not normal coming to a mall and carrying a torch like this man here,” she said, pointing to another consumer shrouded in darkness.
“For me, this is the biggest failure of the A.N.C.,” she added. “We even have a name for it, load shedding. Why don’t they say blackout once and for all?”
In Sandton, a Johannesburg suburb with gated communities and sumptuous malls, Junior Nji, 38, walked out of a well-lit Woolworth’s in an otherwise dark mall. His wife had just sent him a text message with the news that their neighborhood had gone dark and not to bother getting groceries.
“Load shedding boo,” she had written him, using a term of endearment. “This can’t be life.”
That morning, Mr. Nji said, he had finally decided to buy a diesel generator for his house, and workers had come to prepare for the installation. But Mr. Nji, an architect, was holding off on plans to move to a bigger office because of the extra costs of equipping it with a generator. He had been planning, he said, to hire an additional architect and a draftsman.
He texted his wife: “Then let’s go out somewhere. That Chinese restaurant might just be O.K.”

Greece made simple

So Greece owes $310 billion euros to a range of lenders – but note $107 billion were written off by private lenders in 2012, so this brings Greek total debt to almost a half trillion dollars:

Greek lenders and amounts lent

Note that the IMF is a relatively small lender and the “Greek Public Sector” and the EU are large.

The story is a really sad one. Maybe it traces back to 1981, when Greece joined the EU. But arguably the real beginning is 2001, when they joined the Eurozone. As the newest member of the Eurozone, they were fortunate (???) to join as the economy was picking up steam. The go-go years were 2001-2007, when lenders poured money into this promising new member – almost a half trillion dollars!

Thus is it that they were the hardest hit when the recession hit in late 2007. They have been paying a steep price for this massive credit splurge in 2001-2007.

So – – – in summary:

As with so many stories, this one has two sides:

1) a poor country fighting to get resources – to get out of poverty and build a better life for its citizens (don’t believe anyone who starts their story here with “those Greek corrupt politicians”)
2) rich countries who love being bankers – to extend their reach and influence and income while feeling good about trying to help their poor neighbors (don’t believe anyone who starts their story with “those greedy German bankers…”.

Ok, OK, so Greek pride got the best of them when they borrowed almost a half trillion dollars!!!!! 12 million people ….. borrow a half trillion dollars?????!!!!!!

OK, OK, so us rich people got a little carried away when those nice Greeks kept wanting to borrow more ….. so what’s another 100 million when everyone is feeling so fine??????

A few sources explain in ways I trust:

NYT explains
Financial Times Coverage

http://www.nytimes.com/interactive/2015/business/international/greece-debt-crisis-euro.html?_r=0

Fortune Magazine Q&A

Everything to Know About Greece’s Economic Crisis
Geoffrey Smith / Fortune June 29, 2015

How Greece and the eurozone ended up in this mess, and where they go from here

Q. How did we get here?

A. Long story. Greece’s economy was never strong enough to share a currency with Germany’s, but both sides pretended it was, as it satisfied Greek pride and Germany’s ambitions (suffused with war guilt) of building an ‘Ever Closer Union’ in a new, democratic Europe. Reckless lending by French and German banks allowed the Greeks to finance widening budget and current account deficits for six years, but private capital flows dried up sharply after the 2008 crisis, forcing Greece to seek help from Eurozone governments and the International Monetary Fund in 2010.

Q. But all that was 5 years ago. How has Greece not managed to turn the corner since then, when every other Eurozone country that took a bailout has?

A. Greece was the first country to ask for help, and the Eurozone was totally unprepared for it on all levels–political, technological, emotional, whatever. The IMF, too, had no experience of dealing with a country in a monetary union. Consequently, the bailout was badly conceived (a point admitted at the weekend by Dominique Strauss-Kahn, who was head of the IMF at the time), focusing too much on the budget balance and not enough on fixing Greece’s uniquely dysfunctional state apparatus. In a normal recession, government spending can offset the negative effects of private demand contracting, but in this case, the budgetary austerity drove Greece into a vicious spiral. The economy contracted by 25% between 2010 and 2014, fatally weakening Greece’s ability ever to repay its debts.

Q. But didn’t Greece already get a load of debt relief?

A. Yes, €107 billion of it in a 2012 debt restructuring, the biggest in history. But it was only private creditors–i.e., bondholders–who took the hit. The Eurozone and IMF refused to write down their claims (although they did soften the repayment terms), and the new bailout agreement was based on more assumptions (since exposed as too rose-tinted) that Greece could grow itself out of its troubles. The economy continued to shrink in absolute terms and unemployment shot over 25%, forcing an ever bigger burden of taxation onto fewer and fewer shoulders. That created the political environment for this year’s crisis.

Q. You make it sound like this year is different from the previous four…

A. Victory for the radical left-wing Syriza party at elections in January completely changed the political dynamic. Previous governments had come from the political mainstream, and reluctantly played along with rules dictated in Brussels and, indirectly, Berlin. Syriza didn’t have any truck with that. It has campaigned for a 50% write-off of its debts and a relaxation of its budget targets. It has been openly confrontational and reversed key reforms made by the previous governments, despite promising the creditors in February that it wouldn’t. Syriza’s tactics–embodied by Finance Minister Yanis Varoufakis, an economics professor specializing in Game Theory–have been a gamble that the Eurozone would rather make concessions than risk the economic havoc caused by a Greek exit.

5. That gamble has failed, hasn’t it?

As of today, yes. It’s Greece, yet again, which is bearing the burden of everything: the economy had shown signs of bottoming out before Syriza came to power, with business sentiment at its highest in seven years after a very good tourist season in 2014. But the brinkmanship has destroyed confidence, and caused a sharp rise in government arrears and deposit flight, capped now by capital controls and a week-long closure of the banking system. Eurozone financial markets aren’t taking it well, but the prospect of a ‘shock and awe’ intervention by the ECB is keeping the sell-off within limits Monday morning. A real “Grexit” may yet wreak havoc on the Eurozone too, but it’s unlikely that Prime Minister Alexis Tsipras will be around that long to reap the political rewards.

Q. Aren’t the creditors to blame too?

A. For sure, there’s plenty of blame to go round. Most people now recognize that the banks that had lent to Greece pre-crisis should have been forced to take more losses in 2009/2010. Now the Eurozone has effectively swapped the private loans for public ones, any debt write-offs have enormous political costs at home. But governments in Germany and elsewhere have made a rod for their own back by being so stubborn. When Greece defaults, they’re going to lose billions anyway, and the cost of their posturing will become clear to taxpayers who have only been told half the story. They have squandered a host of opportunities to manage that loss in a more orderly way. By failing to accommodate more willing (if still inadequate) Greek governments with debt relief earlier, they prepared the ground for Syriza’s rise.

Q. What happens next?

A. Greece will miss a payment to the IMF Tuesday, and its bailout will expire the same day. The ECB seems likely to ignore the default at least until the planned referendum on Sunday, anxious to avoid responsibility for precipitating the total collapse of the financial system. The creditors are hoping the Greek government will capitulate under the pressure, and be replaced by a new ‘government of national unity’. There’s no sign of that happening yet.

Q. But how long can the current situation go on?

A. The banks are closed until July 7, after the referendum. As long as they still have the lifeline of the ECB’s emergency credit facility (over €85 billion), the banks and the government can continue to operate, albeit in a very restricted fashion. But the government is due to repay €3.5 billion in debts to the ECB on July 20, and if it can’t do that, then the ECB will have to accept that the Greek state is bankrupt, and cancel that credit line. At that point, the banks will be insolvent, and it will only be possible to restore their solvency by re-denominating the rest of their liabilities (i.e. deposits) in a new Greek currency.

Q. How, legally, does Greece leave the Eurozone?

A. Nobody knows. Like Cortes burning his boats after arriving in Mexico, the E.U. deliberately chose not to draft rules for that eventuality when it formed its currency union. There are rules for leaving the E.U., but even Syriza doesn’t want to do that. We will be, as Irish Finance Minister Michael Noonan said at the weekend, “in completely uncharted waters.”

They’ll be damned choppy waterss, too.

Q. How did we get here?

A. Long story. Greece’s economy was never strong enough to share a currency with Germany’s, but both sides pretended it was, as it satisfied Greek pride and Germany’s ambitions (suffused with war guilt) of building an ‘Ever Closer Union’ in a new, democratic Europe. Reckless lending by French and German banks allowed the Greeks to finance widening budget and current account deficits for six years, but private capital flows dried up sharply after the 2008 crisis, forcing Greece to seek help from Eurozone governments and the International Monetary Fund in 2010.

Q. But all that was 5 years ago. How has Greece not managed to turn the corner since then, when every other Eurozone country that took a bailout has?

A. Greece was the first country to ask for help, and the Eurozone was totally unprepared for it on all levels–political, technological, emotional, whatever. The IMF, too, had no experience of dealing with a country in a monetary union. Consequently, the bailout was badly conceived (a point admitted at the weekend by Dominique Strauss-Kahn, who was head of the IMF at the time), focusing too much on the budget balance and not enough on fixing Greece’s uniquely dysfunctional state apparatus. In a normal recession, government spending can offset the negative effects of private demand contracting, but in this case, the budgetary austerity drove Greece into a vicious spiral. The economy contracted by 25% between 2010 and 2014, fatally weakening Greece’s ability ever to repay its debts.

Q. But didn’t Greece already get a load of debt relief?

A. Yes, €107 billion of it in a 2012 debt restructuring, the biggest in history. But it was only private creditors–i.e., bondholders–who took the hit. The Eurozone and IMF refused to write down their claims (although they did soften the repayment terms), and the new bailout agreement was based on more assumptions (since exposed as too rose-tinted) that Greece could grow itself out of its troubles. The economy continued to shrink in absolute terms and unemployment shot over 25%, forcing an ever bigger burden of taxation onto fewer and fewer shoulders. That created the political environment for this year’s crisis.

Q. You make it sound like this year is different from the previous four…

A. Victory for the radical left-wing Syriza party at elections in January completely changed the political dynamic. Previous governments had come from the political mainstream, and reluctantly played along with rules dictated in Brussels and, indirectly, Berlin. Syriza didn’t have any truck with that. It has campaigned for a 50% write-off of its debts and a relaxation of its budget targets. It has been openly confrontational and reversed key reforms made by the previous governments, despite promising the creditors in February that it wouldn’t. Syriza’s tactics–embodied by Finance Minister Yanis Varoufakis, an economics professor specializing in Game Theory–have been a gamble that the Eurozone would rather make concessions than risk the economic havoc caused by a Greek exit.

5. That gamble has failed, hasn’t it?

As of today, yes. It’s Greece, yet again, which is bearing the burden of everything: the economy had shown signs of bottoming out before Syriza came to power, with business sentiment at its highest in seven years after a very good tourist season in 2014. But the brinkmanship has destroyed confidence, and caused a sharp rise in government arrears and deposit flight, capped now by capital controls and a week-long closure of the banking system. Eurozone financial markets aren’t taking it well, but the prospect of a ‘shock and awe’ intervention by the ECB is keeping the sell-off within limits Monday morning. A real “Grexit” may yet wreak havoc on the Eurozone too, but it’s unlikely that Prime Minister Alexis Tsipras will be around that long to reap the political rewards.

Q. Aren’t the creditors to blame too?

A. For sure, there’s plenty of blame to go round. Most people now recognize that the banks that had lent to Greece pre-crisis should have been forced to take more losses in 2009/2010. Now the Eurozone has effectively swapped the private loans for public ones, any debt write-offs have enormous political costs at home. But governments in Germany and elsewhere have made a rod for their own back by being so stubborn. When Greece defaults, they’re going to lose billions anyway, and the cost of their posturing will become clear to taxpayers who have only been told half the story. They have squandered a host of opportunities to manage that loss in a more orderly way. By failing to accommodate more willing (if still inadequate) Greek governments with debt relief earlier, they prepared the ground for Syriza’s rise.

Q. What happens next?

A. Greece will miss a payment to the IMF Tuesday, and its bailout will expire the same day. The ECB seems likely to ignore the default at least until the planned referendum on Sunday, anxious to avoid responsibility for precipitating the total collapse of the financial system. The creditors are hoping the Greek government will capitulate under the pressure, and be replaced by a new ‘government of national unity’. There’s no sign of that happening yet.

Q. But how long can the current situation go on?

A. The banks are closed until July 7, after the referendum. As long as they still have the lifeline of the ECB’s emergency credit facility (over €85 billion), the banks and the government can continue to operate, albeit in a very restricted fashion. But the government is due to repay €3.5 billion in debts to the ECB on July 20, and if it can’t do that, then the ECB will have to accept that the Greek state is bankrupt, and cancel that credit line. At that point, the banks will be insolvent, and it will only be possible to restore their solvency by re-denominating the rest of their liabilities (i.e. deposits) in a new Greek currency.

Q. How, legally, does Greece leave the Eurozone?

A. Nobody knows. Like Cortes burning his boats after arriving in Mexico, the E.U. deliberately chose not to draft rules for that eventuality when it formed its currency union. There are rules for leaving the E.U., but even Syriza doesn’t want to do that. We will be, as Irish Finance Minister Michael Noonan said at the weekend, “in completely uncharted waters.”

They’ll be damned choppy waters, too.

References:

Harvard analysis of Vacation Days