From JoNova

By Jo Nova

It’s so unfair, the wind is free, but who could have known we’d need metals, boats, cables, and magnets?

Governments waved their magic wands to declare the renewable transition would “bling” into existence, but they didn’t bother doing the sums on whether we could mine the vast resources in time, and what would happen to the prices of everything, if every other stupid fashion-obsessed western nation tried to do the  same thing at the same time.

At the academic safe space known as “The Conversion” Thomas York explains to baffled renewables fans why wind farm developers are mysteriously pulling out at the last minute. He doesn’t spell out the baby-nature of the economic reality, but we can read between the lines. The ship called The Infrastructure-Bill has arrived and it’s killing them: the price of steel, copper and aluminium has doubled and tripled; we can’t make the right boats fast enough to build the towers out at sea; everyone wants high-voltage cabling at the same time, and they all need the rare metals for the magnets, which are well, rare. Then, the delays in arranging all this mean the developers fall over their contract agreements timelines, so they start to lose subsidies.

Ultimately developers have raised their prices to cover the true costs, but then the customers aren’t happy. As the University of Leicester researcher says so poignantly when faced with the brutal reality of the market: “it [wind power] is simply not profitable enough”. He even admits “renewable energy still cannot compete with oil and gas.” Sacre bleu!

The UK government magic wand says it can generate 95% of energy from renewable sources by 2030. York, master of understatement, says the “target is now in jeopardy.”

Lordy, but the skeptics were right all along…

By Thomas York, at The Conversion*

Projects just kept getting bigger until it all broke:

The UK government’s strategy for tackling climate change received a major blow in May when Danish developer Ørsted announced that adverse economic developments had halted its 2.4-gigawatt (GW) Hornsea 4 wind farm in the North Sea.

Supply, meet demand: When everyone wants the same thing at the same time, prices rise

Building a wind turbine requires significant amounts of steel, copper and aluminium, all of which doubled or tripled in price between 2020 and 2023. Turbine manufacturers have raised prices in an effort to recover recent losses…

Impending national and international net zero targets also mean that developers globally are having to make earlier investments in transmission infrastructure. An exponential increase in demand for scarce high-voltage cabling has already led to high-profile cancellations of offshore wind farms in the US.

…  Rising demand for rare earth metals used to make magnets in turbine generators has also been snared by geopolitical issues.

There are just not enough boats:

Ørsted ceased work on its 2.2GW Ocean Wind development zone off the coast of New Jersey in 2023, citing a vessel delay in its decision to cancel the project.

According to the advocacy group WindEurope, demand for vessels capable of installing foundations and turbines and laying cables will outstrip availability within the next five years. The gap between the two is forecast to skyrocket between 2028 and 2030….

Delays caused by these issues can result in a problem known as “contract erosion”. In their contracts, developers have a commissioning window within which turbines have to start generating. If they are not operational within this time, they lose their subsidies on a day-by-day basis.

Ultimately, the market hath spoken:

Rising costs mean that even one of the world’s biggest wind farms, Dogger Bank in the North Sea, will not be profitable for its developer, Equinor. As a prospect for generating financial returns, renewable energy still cannot compete with oil and gas.

This is the key argument of economic geographer Brett Christophers in his recent book The Price is Wrong. Christophers argues that, if national governments continue to rely so heavily on private sector investment to build renewable energy, decarbonisation is unlikely to proceed as fast as it needs to. It is simply not profitable enough.

If the government had got out of the way and let the market speak twenty years ago without hiding the truth under a bonanza-fog of subsidies, we wouldn’t have wasted twenty years and trillions of dollars to find out it was not going to work.

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*In 2019 The Conversation gave up conversing and banned skeptics. Thus, they became — The Conversion.