In an illuminating piece by Tilak Doshi on Forbes, the economic trajectory of Europe under the weight of its environmental policies is critically analyzed. Doshi paints a stark picture of what he describes as a self-inflicted wound to Europe’s industrial base, driven by stringent regulations and a shift away from reliable energy sources.
“Voltaire famously said that ‘common sense is not so common.’ Nowhere is this adage more relevant than in the field of energy policies in the European Union. These policies are most vigorously pursued in Germany—Europe’s industrial powerhouse—since it adopted the Energiewende legislation in 2010. The ‘green’ regulations and mandates adopted are simultaneously hostile to fossil fuels and nuclear energy. Energiewende (German for ‘energy turnaround’) refers to the ongoing energy transition to an imagined future of low carbon, environmentally sound, reliable, and affordable energy supply”.
Doshi’s analysis starts with Germany, the hub of Europe’s industrial might, which has seen a significant decline in its industrial production since 2017. This decline is attributed to the Energiewende, a policy initiative aimed at transitioning to renewable energy sources but which has resulted in high energy costs and reduced competitiveness in the global market.
“Germany’s industrial production peaked in November of 2017, and by the end of last year had fallen to a level last seen in 2006 outside of the global financial recession and Covid-19 years. Its industrial sector contracted by almost 14% in the 6 years ending December 2023. … Energy-intensive trade-oriented industries, involving both among small and medium-sized firms as well as behemoths like BASF, have been worst hit, as high energy prices make vast swathes of Germany’s manufacturing sector uncompetitive. The self-inflicted economic meltdown in the pursuit of ‘net zero’ policy goals goes beyond Germany. Industrial capacity is being decimated across Europe”.https://www.forbes.com/sites/tilakdoshi/2024/05/09/as-europe-deindustrializes-can-economic-suicide-be-avoided/?sh=2c2c6f663dfa
Furthermore, Doshi points out that these economic policies have not just been problematic for industry, but also have broader socio-political repercussions. A growing discontent among European citizens is manifesting, particularly among those most impacted like farmers and small business owners, who are increasingly protesting against what they perceive as burdensome and unrealistic regulatory frameworks.
“Since the summer of 2023, Europe’s Green Deal has been on regulatory pause, as EU governments face a ‘greenlash’ against environmental policies. In the face of energy and cost of living crises, farmers, consumers and trade groups are starting to resent the burdensome costs of sprawling environmental regulations across the continent. Nowhere is this sense of grievance more apparent than in the great European farmer’s revolt, as farmers’ protests escalated across the continent since they first started in the Netherlands in October 2019″.
Doshi does not stand alone in his criticism. He cites other commentators who suggest a rethinking of energy policies could be on the horizon in Europe, influenced perhaps by economic necessity rather than environmental idealism.
“The heavy costs of suppressing the use of fossil fuels while promoting intermittent, weather-dependent renewable energy technologies over the past decade has been disguised and diffused by hidden costs and fiscal transfers to powerful constituencies. But over time, ‘net zero’ climate policies have become increasingly unbearable for ordinary people as they reach beyond the power sector to cover agriculture, transport, homes, and buildings”.
This reflection on Europe’s industrial and economic decline under the weight of green policies serves as a cautionary tale about the unintended consequences of well-meaning but poorly implemented government policies. The rigorous enforcement of these policies, without adequate consideration for economic realities and the basic energy needs of a developed economy, may well lead to what Doshi refers to as economic suicide. His article urges a balance—a recalibration of environmental goals with the practical needs of economic stability and growth, reflecting a sentiment that perhaps, the pendulum of environmental policy has swung too far.
The hype, and the reality, about the energy transition in 10 charts
Cooling towers at India’s Mahatma Gandhi Super Thermal Power Project, a 1,320 MW coal-fired power plant in Haryana. Photo: Wikipedia
Over the past few days, I’ve searched the NewsBank archive for uses of “energy transition.” One of the earliest uses of that now-ubiquitous phrase occurred in the Christian Science Monitor in 1981. In a dispatch from Nairobi, a reporter named Richard Critchfield explained that some “4,000 delegates from 154 countries” were gathering in the Kenyan capital for a two-week United Nations conference on new and renewable sources of energy. “The purpose of the conference,” Critchfield explained, was to “promote better understanding of the global energy transition from oil to such new sources as geothermal, solar, wind, ocean, and hydropower or energy from biomass, fuelwood, charcoal, peat, draught animals, oil shale, and tar sands.”
The article doesn’t mention climate change. Instead, it focuses on Kenya’s reliance on imported energy, the country’s geothermal potential, and the “classic third-world poverty trap of soaring oil costs and stagnant export earnings.”
Today, 43 years later, we are inundated with news reports about climate change and claims that we are in the midst of an energy transition that will eliminate our need for hydrocarbons. Myriad examples can prove that point, but consider the Earth Day press release from the White House. The April 22 release included the word “climate” 52 times and references the energy transition three times. For instance, it said President Joe Biden has launched a new “Clean Energy Supply Chain Collaborative to work with international partners to diversity supply chains that are critical to a clean and secure energy transition.” It continued, saying the president is “mobilizing other governments to follow the U.S. lead and commit to achieve net zero government emissions by 2040.”
Before going further, let me be clear about my politics. I’m not a Democrat. I’m not a Republican. I am Disgusted. I have no truck with either party. As a journalist focused on energy and power systems, my affiliation is with the math and the physics. My job is to spotlight the trends and the numbers and to separate the hype from the reality. Unfortunately, much of the media coverage about the energy transition is just that: hype. As I will show in these charts, the hype has soared during the Biden administration.
Last month, the EPA announced rules to “reduce pollution from fossil fuel-fired power plants.” In the agency’s April 25 press release announcing the new regulations, the word “transition” appears three times. The EPA said it was providing “regulatory certainty as the power sector makes long-term investments in the transition to a clean energy economy.” It also quotes the BlueGreen Alliance’s Jason Walsh as saying the EPA mandate provides a “toolbox of critical investments targeted to the workers and communities experiencing the economic impacts of energy transition.”
In these 10 charts, I abide by W. Edwards Deming’s commandment: “In God we trust, all others must bring data.” The numbers I’m presenting aren’t my numbers, they are the numbers. Here’s what the media won’t tell you about the energy transition.
Chart 1
I’ve said it before, but I’ll repeat it: the concept of the energy transition is essentially a Western conceit. The U.S. and Western European countries are spending hundreds of billions of dollars on programs like the Inflation Reduction Act and the Energiewende to fund buildouts of solar, wind, batteries, and tutti-fruity-colored hydrogen, but that doesn’t mean the rest of the world will do the same. There is no evidence that China and India are going through an energy transition. Instead, the numbers show those two countries are building staggering amounts of new coal-fired capacity. That capacity is far greater than the amount of nuclear capacity they are building. This chart, which I first published last December, uses updated figures from the International Energy Agency and Global Energy Monitor.
Chart 2
On April 30, Reuters reported, “India’s coal production and generation shattered records in March as miners and power producers made a Herculean effort to avoid a repetition of the fuel shortages and blackouts that hit the country two years ago. Domestic coal production soared to an unprecedented 117 million tonnes in March 2024, up from 108 million in March 2023 and 96 million in March 2022, according to data from the Ministry of Coal.”
The following two charts show that whatever emissions reductions are achieved in the U.S. and other big economies are being swamped by what’s happening in India and China.
Chart 3
This chart uses the same numbers as those in the previous chart, but putting them in a horizontal format makes them easier to comprehend. It also underscores the challenge of decarbonizing the Indian and Chinese economies.
Chart 4
I have published this graphic before. But I am using it again here because it spotlights the staggering growth of hydrocarbons compared to the growth of the two politically favored sources of power generation, wind and solar.
Chart 5
As mentioned above, the EPA’s new mandates could force the closure of all the remaining coal-fired power plants in the U.S. by the mid-2030s. The mandate, which faces a years-long legal battle before it could become law, claims the U.S. must act on climate change. However, the mandate will not affect China and India, which generate eight times more electricity from coal than the U.S.
Chart 6
More coal-fired capacity is being built in developing countries. And those new plants will result in more emissions. On March 1, the International Energy Agency reported that energy-related CO2 emissions “grew by 1.1% in 2023, increasing 410 million tonnes to reach a new record high of 37.4 billion tonnes. This compares with an increase of 490 Mt in 2022 (1.3%). Emissions from coal accounted for more than 65% of the increase in 2023.”
Furthermore, since 2019, according to Global Energy Monitor, China and India have added some 216 GW of coal capacity. One more number is relevant here: Those five countries have a combined population of 3.4 billion, or about 42% of all the people on the planet. Their electricity use is a fraction of the 12,000 kilowatt-hours per capita per year we use here in the U.S. For instance, in Bangladesh and Indonesia, electricity use is paltry: less than 500 and 1,200 kWh/capita/year, respectively.
Chart 7
I published this chart last month in “Natty Nation.” I’m using it again here because it illustrates the point at hand. Yes, China, India, and other countries are burning more coal. The U.S. is reducing its use of coal. And yet, despite massive federal subsidies and numerous mandates at the local and state levels, wind and solar energy aren’t keeping pace with the growth in natural gas.
Chart 8
The surging use of the term “energy transition” can easily be seen by searching the New York Times archives. Between 2019 and 2023, the use of that phrase jumped 10-fold.
Perhaps the most straightforward way to observe the surge in the marketing of the “energy transition” is to look at the number of times it has been used during the presidential terms of Barack Obama and Joe Biden. Both, of course, are Democrats, and both, of course, have focused on climate. According the National Archives, Obama “believes that no challenge poses a greater threat to our children, our planet, and future generations than climate change — and that no other country on Earth is better equipped to lead the world towards a solution.” However, as seen in the graphic below, the Obama era had far fewer mentions of the energy transition than what has occurred under Biden. Indeed, that phrase has appeared more than 75,000 times during Biden’s presidency. Thus, the media has used the phrase “energy transition” 36 times more during Biden’s three-and-a-half years in the White House than during eight years of Obama’s presidency.
We can think this as the “Woozle Effect,” named after a Winnie The Pooh story by A.A. Milne. The Woozle Effect is also known as “evidence by citation,” which occurs when a source “is widely cited for a claim it does not adequately support, giving said claim undeserved credibility.”
Conclusion
The punchline here is obvious: We are not in the midst of a major energy transition. Instead, what we are seeing is the media echo chamber at work. Media outlets are giving undeserved credibility to the idea of the energy transition despite a metric ton of evidence that shows no such transition is happening, particularly in developing countries like Bangladesh, China, India, Indonesia, and Vietnam. Indeed, the surge in the use of the phrase by the Biden administration — and its many allies in big media outlets — shows that we’re being bombarded by a public relations campaign that’s designed to convince the public and policymakers that an energy transition is happening and that we should be spending staggering sums of money on it.
A decade ago, energy analyst and polymath Vaclav Smil wrote, “hope for a quick and sweeping transition to renewable energy is fueled mostly by wishful thinking and a misunderstanding of recent history.” He explained that “for any new energy source to capture a large share of the market require[s] two to three generations: 50 to 75 years.” He concluded, “Energy transitions on a national or global scale are inherently protracted affairs.” That statement was true in 2014. And will be true for decades to come. Just don’t expect to read about it in major media outlets.
JP Morgan, BlackRock drop out of climate banker cabal, and admit the Net Zero transition is “delayed”
In February three of the four largest financial houses in the world, left the giant financial cabal called“Climate 100+” (the fourth one left a year ago). BlackRock, JP Morgan and State Street all parted ways with the billionaire-club of philanthropists trying to bully the world into buying their own renewables. In the two months since then, two of their CEO’s have put out “letters to shareholders” predicting how the transition is going to be slower and harder and how we still need fossil fuels.
Suddenly everyone sounds like an energy skeptic.
There are lots of reasons for this shift:
1: US Republican States are pointing the “AntiTrust” gun at the billionaire banker club because it looks exactly like a monopolistic cabal doing its best to collude to reduce competition. The States are also firing up the fiduciary duty canon. Hence the bankers not only want to back away from the cabal, they want to sound like bankers that care about investing their clients funds.
2. The renewables bubble is deflating fast, and the CEO’s can see what’s coming. Think of their renewable energy passion a few years ago as a pump-n-dump scheme and it all makes more sense. Right now smart bankers are smoothing the exit ramp out of the bubble they created and hoping no one notices how wrong all their previous statements were.
3. Maybe there’s a point where smart banker billionaires realize they don’t want their own homeland to hit the skids. They’ve all made a fortune in the last four years, but who wants that fifth private jet if there is no homeland to come home too? Jamie Dimon astonished people when came out in January saying Trump’s policies were “kinda right”. Billionaires might want to visit China, but they don’t want to live there. And as I said at the time, maybe the wake up call was when the paratroopers-of-death dropped into a democracy and the Ivy league started cheering them on.
4. And besides, Trump might even win.
How times have changed
A year ago the CEO of the JP Morgan was calling for forced property seizure in a climate emergency:
One of the world’s highest-profile bankers – JP Morgan Chase CEO Jamie Dimon – said the US government should consider seizing private property to boost the number of green energy projects coming through the pipeline. Dimon told the bank’s shareholders that availability of wind and solar projects needs to be accelerated urgently as “the window for action to avert the costliest impacts of global climate change is closing”.
Inflation, interest rates, and wars may well delay the energy transition by quite a long time, JP Morgan has warned in a call for “a reality check” on its shift from hydrocarbons to alternatives.
…the bank’s head of global energy strategy, Christyan Malek, … forecasts that governments will dial down the push to transition from oil and gas to wind and solar as their financial resources dwindle.
Jamie Dimon’s Letter to Shareholders in 2024, is a 30,000 word 70 page letter. Despite being a small book it mentions “climate” just 13 times. He’s now more concerned about China (18 mentions) and uses the word military 24 times. He criticizes the Inflation Reduction Act because it angered all the allies of the US and he argues the US should dig up gas and sell it for political gain as well as the money:
Trade is realpolitik, and the recent cancellation of future liquified natural gas (LNG) projects is a good example of this fact. The projects were delayed mainly for political reasons — to pacify those who believe that gas is bad and that oil and gas projects should simply be stopped. This is not only wrong but also enormously naïve. One of the best ways to reduce CO2 for the next few decades is to use gas to replace coal. When oil and gas prices skyrocketed last winter, nations around the world — wealthy and very climate-conscious nations like France, Germany and the Netherlands, as well as lower-income nations like Indonesia, the Philippines and Vietnam that could not afford the higher cost — started to turn back to their coal plants. This highlights the importance of safe, secure and affordable energy. Second, the export of LNG is a great economic boon for the United States. But most important is the realpolitik goal: Our allied nations that need secure and affordable energy resources, including critical nations like Japan, Korea and most of our European allies, would like to be able to depend on the United States for energy. This now puts them in a difficult position — they may have to look elsewhere for such supplies, turning to Iran, Qatar, the United Arab Emirates or maybe even Russia. We need to minimize anything that can tear at our economic bonds with our allies.
The strength of our domestic production of energy gives us a “power advantage” — cheaper and more reliable energy, which creates economic and geopolitical advantages.
Meanwhile Larry Fink, CEO of BlackRock, the largest asset fund in the world, has undergone a very similar transformation. In 2021, he was raving how the existential crisis and how this was the beginning of a long and rapidly accelerating transition:
I believe that the pandemic has presented such an existential crisis – such a stark reminder of our fragility – that it has driven us to confront the global threat of climate change more forcefully and to consider how, like the pandemic, it will alter our lives. It has reminded us how the biggest crises, whether medical or environmental, demand a global and ambitious response.
…I believe that this is the beginning of a long but rapidly accelerating transition – one that will unfold over many years and reshape asset prices of every type. We know that climate risk is investment risk.
But now, after the bubble came and went, now he’s telling us energy security is just as important as the climate crisis:
By Eric Johnston, March 27, 2024, The Australian Business Review
One of the world’s most influential investors has said the switch is on to “energy pragmatism” that recognises energy security is just as important in the move to net zero. Larry Fink of the $US10 trillion ($15.3 trillion) BlackRock has acknowledged the world will need to rely on oil and gas “for years to come” through the uneven energy transition.
… his letter … which runs to almost 30 pages, only mentions climate change in passing and the discussion is limited to strategies under way in the energy transition.
These are the levers of power you see shifting. BlackRock manages $10 trillion dollars in assets, and according to Jamie Dimon’s letter, JP Morgan was managing assets of $7.6 trillion. When these men write long letters, Wall Street studies them.
A lot of people have suddenly started to say in April that “we always knew the transition would be expensive” — the phase change is following the bankers.
Sunset kills solar output the same way calm weather renders wind turbines utterly useless. Around the world $trillions have been squandered on occasional power generation which is always and everywhere dependent on sunshine and/or the weather.
In the beginning, there was a perfectly functional power supply with reliable generators connected by a systematically designed grid to every home and business – delivering power that was affordable and available, whatever the weather.
Then came the wind and sun cult peddling the delusion that wind and solar power can totally replace coal, gas and nuclear (with rent seeking crony capitalists in hot pursuit).
That delusion rests on the hidden fact that for every single MW of wind and solar capacity has to be another MW of dispatchable generation connected to the grid, meaning the only hope of keeping the lights on is premised on having coal, gas or nuclear power capacity equal to, or greater than, the total demand for power on any given grid, on any given day.
The wind and solar industries’ propaganda wing started out calling it ‘backup’, these days they talk about ‘firming’.
Shine a light on the total output of wind and solar over time – and whether you call it ‘backup’ or ‘firming’ – there’s an awful lot of it.
In Australia, the average annual power output of all of the wind turbines connected to the Eastern Grid sits at 28% (their total capacity is 11,400MW).
At 28%, those turbines are working less than 2 days a week. With 168 hours in a week (24 x 7), 28% of a week is 47 hours (168 x 0.28) – 60 minutes less than 2 full days. But it’s even worse than that, because wind power outfits can never tell you, with any meaningful advance notice, which two days of the week they might be generating a little power; the power that they keep telling us is powering X million homes every day.
Given that power consumers are pretty keen on having electricity delivered 7 days a week, those ‘backup’ or ‘firming’ generators are doing an awful lot of heavy lifting, and will continue to do so forevermore – at a staggering and entirely unnecessary cost.
In the pieces below, Alan Moran outlines the cost of so-called ‘firming’ the occasional output from wind and solar, a cost born by power consumers and taxpayers.
Australia’s government-induced transition to a high-cost, unreliable electricity supply Canberra Daily Alan Moran 2 April 2024
Australian governments are forcing a “transition” in electricity supply from coal (and gas) to wind and solar. Though the ACT has virtually no electricity generation other than that from rooftops, it leads the way in terms of its purchasing contracts for grid-sourced renewables.
Wind and solar have different operating characteristics than coal and gas electricity generators. Coal and gas (and nuclear) can operate pretty much continuously but weather and nightfall limits solar to generating only 20 per cent of the time and wind to about 30 per cent. And electricity supply from wind and solar generators is highly variable.
With wind/solar at their present market share of about 30 per cent, both coal and gas can fill their troughs in supply. But it is the policy of all Australian government jurisdictions to force coal and most gas out of the market. Moreover coal (or, for that matter, nuclear) is ill-suited and costly as a backstop to variable wind and solar supplies.
Recognising the need to compensate for the intermittency of wind and solar energy, 15 months ago, Commonwealth Energy Minister, Chris Bowen, proposed a Capacity Investment Scheme to iron out the peaks and troughs of wind and solar generated electricity.
The idea was to induce a build-up of storage systems to enable uninterrupted supply of electricity. This becomes increasingly necessary to provide support as coal, which still supplies over 60 per cent of the nation’s electricity, is phased out.
Approved storage systems under the Capacity Investment Scheme are pumped hydro like Snowy 2 and batteries. Pumped hydro generates by releasing water when alternative supplies are short and uses electricity at other times, when it is in excess supply (and therefore cheap), to pump the water back uphill. Batteries supply and replenish on a similar basis.
Snowy 2 (providing the boring machine named “Florence” can be made to work) with other pumped hydro is projected to provide enough storage for about 9 hours supply as the market grows. The Australian Energy Market Operator (AEMO) reckons we need to increase this to 12 hours by using batteries.
Mr Bowen’s Capacity Investment Scheme was earmarked to help do that job. But, in the event, 23 of its planned 32 gigawatts of installed capacity is earmarked for additional wind and solar. Rather than capacity support for wind and solar, it has become just another subsidy scheme to induce additional supplies of this renewable energy. In passing, it is worth recalling that 20 years ago we were assured that all such schemes would be unnecessary, as wind and solar would by now have become lower cost technologies than the archaic coal plant they would replace!
With the Capacity Investment Scheme and other measures, the Albanese Government has turbocharged the renewable energy subsidy programs from an annual cost of $9 billion under Scott Morrison to over $15 billion. The various measures are summarised below.
So, we have seen a vast increase in subsidies (that is, costs to energy users and taxpayers) which has brought about a considerable increase in government outlays and in the price of energy to households and commercial users alike. For energy-intensive industries, like smelters, the increased prices are crippling and governments have introduced offsetting support – ironically, they are providing subsidies to offset the effect of the subsidies that they have already imposed!
All this aside, AEMO’s planned half a day of storage is hopelessly inadequate in view of the high variability of wind and solar. Overseas estimates are that a wind/solar system requires at least 20 days storage, while the highly regarded Australian consultancy, Global Roam, has estimated that Australia would need at least 10 days storage. And this is with a perfectly designed system involving a 20 per cent over-supply of generation capacity without any losses during storage or transmission.
These are early days of the energy “transition”. But our politicians are plunging us into an electricity supply system with perilously higher costs and lower reliability than we are already experiencing. Canberra Daily
The grim cost of firming up solar and wind Substack Alan Moran 22 April 2024
The ‘transition’ of the electricity supply industry has been forced by government subsidies to renewable energy generators with increased impositions on coal and gas with higher royalty charges and bans playing a secondary role. The first subsidies were introduced by John Howard in 2001 as the Mandatory Renewable Energy Target. He later described this as his worst political decision. It required electricity retailers gradually to include wind or solar to comprise 2 per cent of their additional energy. This was quantified as 9,500 megawatt hours.
These measures pandered to concerns about the global warming. They also responded to lobbyists, who wheeled out experts claiming that renewable energy technology would follow a variation of Moore’s Law, where computer chip performance doubles every two years. The application of this to electricity supply, it was argued, just needed a short-term leg-up.
Time has demonstrated this to have been spurious. The need wind and solar facilities have for subsidies, far from withering away, have escalated.
The initial measure provided a subsidy to renewables (and cost to consumers) growing to about $380 million per year. To his credit, John Howard resisted pressures to increase this but the Rudd/Gillard governments and state governments vastly expanded the support with new schemes for rooftop facilities and budgetary expenditures. The Turnbull and Morrison governments further expanded the subsidies, which at the outset of the present government’s tenure amounted to $9 billion per annum.
The Albanese government has introduced a number of additional measures. These include the Safeguard Mechanism, which requires the major carbon-emitting firms to reduce their emissions by 30 per cent by 2030 or buy the equivalents in carbon credits. The cost is conservatively estimated at $906 million per annum.
The government is also set to introduce the Capacity Investment Scheme involving power purchasing agreements designed to attract $68 billion of spending on additional wind, solar, and batteries. The best estimate of the cost to the taxpayer is $5,775 million per annum. In addition, the government is expediting the transmission roll-out.
Present subsidy levels are estimated at $15.6 billion per annum.
The effects of subsidies have come in three phases.
The first was in the decade after 2003 when renewables progressively increased their market share as required by regulations. By 2014/15, wind and solar had grown to about 7 per cent of the electricity market. The subsidised supplies placed downward pressure on the market price as well as taking market share from coal. That outcome was intensified by new Queensland gas supplies coming on stream. Without access to export ports, that gas was redirected to domestic electricity generation and the share of gas supplies in the National Electricity Market increased from 8 per cent to 12 per cent. Gas now has more lucrative markets overseas and governments are exerting pressure on the producers to allocate more than is commercially sensible to the domestic market.
This first phase came to an abrupt end when low prices and higher supplies forced major coal generators, Northern Power in South Australia and Hazelwood in Victoria, out of the market.
Those market exits led to a second phase, whereby reduced coal capacity brought a trebling of wholesale market prices from their 2015 level of $40 per megawatt hour (MWh). Covid caused a temporary downward blip but the wholesale price is averaging $119 per megawatt hour in the March quarter, 2024.
These higher prices reflect the higher cost of wind and solar and will continue to prevail and, in fact, increase. Price increases may be concealed by governments entering into power purchasing agreements but this means subsidies financed by taxpayers rather than electricity users.
The subsidies to wind and solar have now resulted in their market share growing from zero 20 years ago to over 30 per cent. This is ushering in the third phase of the ‘transition’, which involves desperately seeking ways to firm up the intermittent and largely unpredictable electricity supply from wind and solar.
Gas, coal, and nuclear can operate pretty much continuously and without special storage facilities, but weather and nightfall limit solar to generating only 20 per cent of the time and wind to about 30 per cent. And electricity supply from wind and solar generators is highly variable.
With wind and solar at their current market share, coal and gas can fill their troughs in supply, albeit unprofitably. But the policy in all Australian government jurisdictions is to force coal and most gas out of the market. Moreover, coal (and, for that matter, nuclear) is technically ill-suited and costly to be used as a back-stop to variable wind and solar supplies. ‘Social licences’ aside, new coal or nuclear plants could not be commercially built except as near continuous baseload.
Other means of ‘firming’ wind and solar supplies are therefore increasingly required. One such is the conversion of Snowy Hydro into a pumped storage facility. Pumped hydro generates by releasing water when alternative supplies are short and uses electricity when it is in excess supply (and therefore cheap), to pump the water back uphill. Batteries supply and replenish on a similar basis.
Snowy 2 is planned to provide 376 megawatt hours of storage. The Capacity Investment Scheme is an attempt to augment this, though, notwithstanding its name, it earmarks 70 per cent of its intended power purchasing agreements simply for more wind and solar. These add nothing to replacing the dispatchable (controllable) power being lost from the forced retirement of coal plants. The Capacity Investment Scheme will add just 36 gigawatt hours of storage from the 9 GW of facilities planned to be contracted.
The Australian Market Operator’s (AEMO) Integrated Systems Plan for 2050 envisages a total storage capacity of 642 gigawatt hours for a system double the size of the present one and overwhelmingly powered by wind and solar. This is utterly inadequate for backing up intermittent power.
Francis Menton has assembled a wealth of evidence of how much storage a renewables system would require. He authored a major report for the Global Warming Policy Foundation as well as many other papers like this. Basically, his work shows that a wind and solar system, if it is to provide a secure and reliable electricity supply, requires some 26 days of storage. For Australia, this means 13,000 gigawatt hours of storage, which is 25 times what the AEMO Integrated Systems Plan envisages.
The highly regarded GlobalRoam consultancy estimated that the National Electricity Market (which excludes Western Australia), with perfect planning and no losses in storage or transmission, would require at least 9,000 gigawatt hours of storage. The costs of this, at $US 350 per kWh, would be three times Australia’s GDP for batteries that would need to be replaced every 12 years.
It might be argued that Germany, with little storage back-up, already has wind and solar providing 45 per cent of its electricity and, although it has some of the world’s highest prices, its supply is reliable. But Germany also has access to supplies
Our politicians are plunging us into a perilous future. Policies have already given us an electricity supply system with costs that cannot support energy-intensive industries. Those policies are now poised to bring about lower reliability than is compatible with a first-world economy. Substack
Germany actually just announced plans to reactivate coal plants to provide reserve power and lower the risk of blackouts during the coming winter and years to come.
Germany’s coal phase-out plans face a potential setback after the energy regulator predicted the country will need a lot more fossil-fuel power plants on standby to help keep the lights on in the coming years.
The need for so-called reserve capacity to cover shortfalls in wind and solar generation during the 2026/27 winter period is set to reach 9.2 gigawatts, double the amount put aside for the last heating season, the regulator said Tuesday. That’s even more than the 8.3 gigawatts of mainly coal-fired backup deployed in 2022, when Russia curbed pipelined natural gas supplies to Europe.
The solution the German government is pursuing is no solution at all — offsets!
Reuters reports that German “coal-fired power plans will be reactivated and the government will make proposals by summer next year on how to offset increased carbon dioxide these plants will generate this winter.”
Germany will purchase some kind of offset certificates that will have no meaningful impact on the fact that German coal plants burn brown lignite, which is the dirtiest and least efficient variety of coal. It is far inferior to the cleaner-burning hard black anthracite mined in America.
The German energy economy has fallen victim to conflicting Green ideologies.
Mark Mills explains the many ways the deck is stacked against those gambling on Wind and Solar energy to replace hydrocarbon fuels. The transcript is below in italics with my bolds and added images.
Have you ever heard of “unobtanium”?
It’s the magical energy mineral found on the planet Pandora in the movie, Avatar. It’s a fantasy in a science fiction script. But environmentalists think they’ve found it here on earth in the form of wind and solar power.
They think all the energy we need can be supplied by building enough wind and solar farms; and enough batteries.
The simple truth is that we can’t. Nor should we want to—not if our goal is to be good stewards of the planet.
To understand why, consider some simple physics realities that aren’t being talked about.
All sources of energy have limits that can’t be exceeded. The maximum rate at which the sun’s photons can be converted to electrons is about 33%. Our best solar technology is at 26% efficiency. For wind, the maximum capture is 60%. Our best machines are at 45%.
So, we’re pretty close to wind and solar limits. Despite PR claims about big gains coming, there just aren’t any possible. And wind and solar only work when the wind blows and the sun shines. But we need energy all the time. The solution we’re told is to use batteries.
Again, physics and chemistry make this very hard to do.
Consider the world’s biggest battery factory, the one Tesla built in Nevada. It would take 500 years for that factory to make enough batteries to store just one day’s worth of America’s electricity needs. This helps explain why wind and solar currently still supply less than 3% of the world’s energy, after 20 years and billions of dollars in subsidies.
Putting aside the economics, if your motive is to protect the environment, you might want to rethink wind, solar, and batteries because, like all machines, they’re built from nonrenewable materials.
Consider some sobering numbers:
A single electric-car battery weighs about half a ton. Fabricating one requires digging up, moving, and processing more than 250 tons of earth somewhere on the planet.
Building a single 100 Megawatt wind farm, which can power 75,000 homes requires some 30,000 tons of iron ore and 50,000 tons of concrete, as well as 900 tons of non-recyclable plastics for the huge blades. To get the same power from solar, the amount of cement, steel, and glass needed is 150% greater.
Then there are the other minerals needed, including elements known as rare earth metals. With current plans, the world will need an incredible 200 to 2,000 percent increase in mining for elements such as cobalt, lithium, and dysprosium, to name just a few.
Where’s all this stuff going to come from? Massive new mining operations. Almost none of it in America, some imported from places hostile to America, and some in places we all want to protect.
Australia’s Institute for a Sustainable Future cautions that a global “gold” rush for energy materials will take miners into “…remote wilderness areas [that] have maintained high biodiversity because they haven’t yet been disturbed.”
And who is doing the mining? Let’s just say that they’re not all going to be union workers with union protections.
Amnesty International paints a disturbing picture: “The… marketing of state-of-the-art technologies are a stark contrast to the children carrying bags of rocks.”
And then the mining itself requires massive amounts of conventional energy, as do the energy-intensive industrial processes needed to refine the materials and then build the wind, solar, and battery hardware.
Then there’s the waste. Wind turbines, solar panels, and batteries have a relatively short life; about twenty years. Conventional energy machines, like gas turbines, last twice as long.
With current plans, the International Renewable Energy Agency calculates that by 2050, the disposal of worn-out solar panels will constitute over double the tonnage of all of today’s global plastic waste.Worn-out wind turbines and batteries will add millions of tons more waste. It will be a whole new environmental challenge.
Before we launch history’s biggest increase in mining, dig up millions of acres in pristine areas, encourage childhood labor, and create epic waste problems, we might want to reconsider our almost inexhaustible supply of hydrocarbons—the fuels that make our marvelous modern world possible.
And technology is making it easier to acquire and cleaner to use them every day.
It would take a wind farm the size of Albany county NY to replace the now closed Indian Point nuclear power plant.
The following comparisons are typical—and instructive:
It costs about the same to drill one oil well as it does to build one giant wind turbine. And while that turbine generates the energy equivalent of about one barrel of oil per hour, the oil rig produces 10 barrels per hour. It costs less than 50 cents to store a barrel of oil or its equivalent in natural gas. But you need $200 worth of batteries to hold the energy contained in one oil barrel.
Next time someone tells you that wind, solar and batteries are the magical solution for all our energy needs ask them if they have an idea of the cost… to the environment.
“Unobtanium” works fine in the movies. But we don’t live in movies. We live in the real world.
I’m Mark Mills, Senior Fellow at the Manhattan Institute, for Prager University.
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“The forced ‘energy transition’ is in trouble despite huge government commitments to wind, solar, batteries, and EVs. Each of the three fossil fuels is experiencing a global boom, and as Politico reports, politicians are backing away from energy taxes in favor of the cheaper, reliable, convenient mass energies consumers demand.”
Uncompetitive energies need government, studies, and ceaseless PR. Competitive energies need free markets where consumers vote with their dollars and taxpayers are spared. Increasingly, the price verdicts of (not so) green energies are coming in, and the public is not happy.
Co-authors Jordan Wolman, Marie French, and Zi-Ann Lum begin:
Conservatives are aggressively targeting efforts to reduce carbon emissions across the continent. Leaders across the continent who have embraced aggressive climate policies are facing a political backlash as the programs drive up the cost of electricity, home heating and even ordinary goods.
In New York, Washington, Pennsylvania and California — and even Canada — concerns about the costs of curbing greenhouse gas emissions are fueling voter revolts and prompting some liberals to scale back or reframe their own climate ambitions.
Wait! We were repeatedly told by the experts and government that the costs of green energy were falling, and scale economies would usher in an “energy transition.” Gore, Obama, Biden …. John Holdren, Joe Romm …. Michael Mann, Andrew Dessler ….
Take Washington, where the state’s year-old program is facing a November ballot initiative that would halt the effort, which aims to reduce the state’s net carbon emissions to zero by 2050…. Washington’s cap-and-trade program “doesn’t do anything other than make gasoline and groceries and eating more expensive,” Brian Heywood, the ballot measure’s sponsor, said in an interview. “I call it the, ‘Hey, just buy a Tesla, bro,’ mentality.”
Pricing CO2 (carbon tax) is not happy politics:
Canadian Prime Minister Justin Trudeau has already discovered what a potent issue carbon pricing has become: The liberal leader’s reelection bid is in jeopardy due, in part, to an April 1 hike to the nationwide carbon tax that’s sparked protests and widespread opposition.
Now governors are facing some of the same blowback. Pennsylvania Gov. Josh Shapiro last month bowed to opposition from Republicans, labor groups and fossil fuel interests to the Northeast’s carbon pricing program and proposed his own in-state carbon cap instead, drawing immediate fire from both parties and doubts it can pass a divided Legislature.
And New York Gov. Kathy Hochul, amid growing pushback from the state’s business community, is considering neutering her nascent program in self-defense. She’s proposed a price cap so low that it wouldn’t spur enough reductions to ensure New York hits its 2030 emissions target of 40 percent below 1990 levels….
Trying to find “benefits” to offset the immediate costs is hard–because discernible climate change from policy is out decades, if ever. Back to Canada:
In Canada, support for carbon pricing — Trudeau’s signature policy — has eroded as high interest rates and cost of living concerns have dominated. The pushback has put Trudeau, with sinking popularity, on the defensive: His own Liberals have exempted home heating oil from the fuel charge and are selling the policy’s rebate checks as an affordability measure rather than a climate program.
And Canada’s left-leaning New Democratic Party, in a surprise move, recently walked back its support for the Trudeau government’s consumer fuel charge, suggesting there are more effective policies to fight climate change.
Meanwhile, rival Conservative Leader Pierre Poilievre is betting long-tail rage over the carbon tax can help his party win the next election, to be held by October of next year — and finally oust Trudeau from office.
In Washington State:
Gas prices have soared in Washington to about $1 above the national average and higher than neighboring Oregon, according to AAA, though Inslee’s office disputes that all of the spike is tied to the cap-and-trade program. A poll conducted last month of 600 registered Washington voters found 53 percent support the effort to end cap and trade, with a margin of error of 4.7 percentage points.
State lawmakers amended the program last month to give farmers and truckers a rebate to ease the costs of fuel surcharges. But it’s not nearly enough to mollify opponents…. Heywood said voters are feeling the crunch. “It doesn’t do anything really other than make some people feel good to address carbon dioxide output,” he said. “And it’s doing it enormously off the backs of the working class and the working poor.”
The forced ‘energy transition’ is in trouble despite huge government commitments to wind, solar, batteries, and EVs. Each of the three fossil fuels is experiencing a global boom, and politicians are backing away from energy taxes in favor of the cheaper, reliable, convenient mass energies consumers demand. Expect this to continue through and after the coming elections.
In my self-designated role critiquing various schemes for total transformation of the world energy system, I get to review large amounts of poor, shoddy, and incompetent work. When people get into advocating for this “energy transition,” the stars regularly align to bring forth the most extreme levels of ineptitude. Start with the fact that the “smartest” people are filled with arrogance and hubris, but are not actually very smart. Add that many innumerate Politics and English majors have flooded into a field that cries out for engineering calculations. Add too that groupthink and orthodoxy enforcement prevent anyone from pointing out obvious flaws. And then throw in a strong dose of religious zealotry that obstructs the intrusion of anything resembling critical thinking. All in all, it’s a prescription for catastrophe.
But in a field rife with bad, worse, still worse, and even dangerously incompetent work, I don’t know if I’ve ever seen anything as shockingly inept as the Report just out from the International Energy Agency with the title “Batteries and Secure Energy Transitions.” The Report has a date only specified to the month of “April 2024,” but the press release came out just two days ago on April 25.
If I had been given the assignment by the North Koreans to write the Report to somehow induce the West to self-destruct, I don’t know how I would have done it differently.
Are you familiar with the International Energy Agency? It is not part of the UN, but rather a separate consortium currently of some 40+ countries, mostly Western and mostly rich, founded in the wake of the oil shocks of the 1970s with a then-goal of promoting energy security. It is based, of course, in Paris. The current (and since 2015) head is a guy named Fatih Barol. Here is a picture of Barol from Wikipedia:
Somewhere along the line the IEA completely lost track of the energy security mission, and turned into an unabashed advocate for the green energy transition. That’s where they are today.
I don’t know how many people work at the IEA, but it seems like most to all of them got in on writing this Report. On page 5 there is a list of some 35 “directors,” “lead authors,” and “principal authors” from among IEA employees, plus another 4 who provided “support,” and then, on pages 6 to 8, some 89 people said to be “high-level government representatives and international experts from outside of the IEA” who somehow “contributed to the process.” From the content of the Report, one has to wonder if any of these people ever completed the study of arithmetic at the sixth-grade level, let alone if any have read any of the important work in this area.
The thesis of the Report is that batteries, and particularly lithium ion batteries, are the key to the impending energy transition, and need to be scaled up massively and immediately with whatever amount of government subsidies and handouts that it takes. Here are a few quotes from the press release:
After their deployment in the power sector more than doubled last year, batteries need to lead a sixfold increase in global energy storage to enable the world to meet 2030 targets. . . . In the first comprehensive analysis of the entire battery ecosystem, the IEA’s Special Report on Batteries and Secure Energy Transitions sets out the role that batteries can play alongside renewables as a competitive, secure and sustainable alternative to electricity generation from fossil fuels. . . . IEA Executive DirectorFatih Birol [said,] “Batteries will provide the foundations in both areas, playing an invaluable role in scaling up renewables and electrifying transport while delivering secure and sustainable energy for businesses and households.
I suppose it would be too much for me to expect these grandees to have read my energy storage report, published by the Global Warming Policy Foundation in December 2022. But if you are claiming that you have at hand a “competitive, secure and sustainable alternative to electricity generation from fossil fuels,” as these guys are, there is a series of very obvious question that must be addressed. Those include:
Quantitatively, how much energy storage, in watt-hours (or gigawatt-hours)will be necessary to provide full back-up to a national electricity grid once all fossil fuel back-up has been banished and the storage is all that is available when the instantaneous generators are not supplying the full demand?
How much will that amount of storage cost?
What is the maximum length of time that energy must be held in storage before it is called upon, and is the proposed storage technology capable of the task of storing energy for that period of time?
There are other comparably important questions, but at least those are absolutely essential.
The IEA Report addresses none of them.
What we get instead is endless happy talk about the wonders of lithium ion battery technology, how the costs are falling rapidly, how deployments are soaring, and how utopia (i.e., meeting UN COP 28 emissions reduction targets) is right around the corner if only we accelerate the process with massive government “support.” The full Report is some 159 pages (with appendices and references), so I can only give you a small sample. But here are a few choice quotes from the Executive Summary:
From page 11: “Batteries are an essential part of the global energy system today and the fastest growing energy technology on the market. Battery storage in the power sector was the fastest growing energy technology in 2023 that was commercially available, with deployment more than doubling year-on-year.”
Also from page 11: “Lithium-ion batteries dominate battery use due to recent cost reductions and performance improvements. Lithium-ion batteries have outclassed alternatives over the last decade, thanks to 90% cost reductions since 2010, higher energy densities and longer lifetimes.”
From page 12: “Policy support has given a boost for batteries deployment in many markets but the supply chain for batteries is very concentrated. Strong government support for the rollout of EVs and incentives for battery storage are expanding markets for batteries around the world.” [For the obtuse among the readership, “policy support” is code for vast subsidies and handouts.]
More from page 12: “Batteries are key to the transition away from fossil fuels and accelerate the pace of energy efficiency through electrification and greater use of renewables in power.”
Still on page 12: “To triple global renewable energy capacity by 2030 while maintaining electricity security, energy storage needs to increase six-times. To facilitate the rapid uptake of new solar PV and wind, global energy storage capacity increases to 1 500 GW by 2030 in the NZE Scenario, which meets the Paris Agreement target of limiting global average temperature increases to 1.5°C or less in 2100. Battery storage delivers 90% of that growth, rising 14-fold to 1200 GW by 2030.”
Check out that last bullet point. Yes, they are so dumb that they discuss energy storage capacity in GW rather than GWh. How did they come up with the line that to reach their goals “energy storage needs to increase six-times” when they don’t even know the right units to do the calculations? You won’t find an answer in this Report. In my own energy storage report, I calculated that to reach a zero-emissions electricity sector that could get through a year without fossil fuel back-up would require increasing energy storage by something around 10,000 times. I used the correct units and showed how my calculations were done.
And how about the question of the length of time that energy must remain in storage to back-up a wind/solar powered grid, and whether the proposed technology is up to the task? In my own report, which only considered scenarios of getting through a single year, I showed that much of the stored energy would need to be held for 6 – 12 months before use. In a further blog post on September 28, 2023, I covered a new report then out from the UK’s Royal Society (described by me as “semi-competent”), which used 37 years of data. Based on the 37 years of data, that report concluded that hundreds of hours worth of grid peak usage would need to be held in storage for multiple decades in order to get through worst-case sun and wind droughts. I had this quote from the Executive Summary of the Royal Society report:
Wind supply can vary over time scales of decades and tens of TWhs of very long-duration storage will be needed. The scale is over 1000 times that currently provided by pumped hydro in the UK, and far more than could conceivably be provided by conventional batteries.
(Emphasis mine.). I’m ready to forgive these IEA guys for not being familiar with my own report, but not for complete ignorance of the Royal Society’s effort.
The entire discussion that I can find in the IEA Report on the problem of need for massive amounts of very long duration storage consists of a chart and one paragraph of text on page 47. Here is the chart:
And the text:
Iron air and other battery technologies that potentially could enable the storage of electricity over longer durations measured in weeks, are still in their infancy. Currently it is not clear whether those technologies can be developed so as to provide what is required in a cost-efficient way. For even longer duration storage, such as seasonal storage, battery technologies are not fit for purpose, and other mechanical, e.g. pumped storage hydro, and chemical, e.g. hydrogen storage, technologies need to be deployed.
So 90 plus percent of the storage needed to back up the intermittently-supplied grid needs to be stored for months and years, but the only battery technologies that can even last for “weeks” are things that are “in their infancy” and where it is “not clear” that they can be provided in a “cost-efficient way.”
Overall, a shockingly inept and embarrassing piece of work from the IEA. Undoubtedly our government will react by piling forth a few more hundreds of billions of dollars to subsidize batteries to do a job for which they are completely “unsuitable.”
First published JoNova; If you fell for the government propaganda that renewables are the cheapest form of energy, the Guardian will help set you straight.
Here’s the truth: energy transition is hard. Not everyone gets a pony
Jobs will change, communities will be affected, but we have a shot at rising to the challenge of global heating
The climate crisis has long been defined by its lies: From the original sin of science denial, to Tony Abbott’s confected carbon tax panic, to the latest yellowcake straw man. But the most damaging porky of all might bethat the transition to renewable energywill be easy.
Government messaging has propagated this myth, vacillating between the torpid technocracy of targets, acronyms and megawatt hours and the sunny spin that promises “a cheaper, cleaner energy future!”.
When asked to rank energy sources in order of cost, renewables are rated the most expensive. Fossil fuels are seen as a cheaper solution, while nuclear is preferred by those who don’t support the transition anyway.
These findings are hardly surprising, the result of higher electricity bills as global prices for fossil fuels soar. Energy companies, like all big corporations, clip the inflation ticket and roof-top solar incentives are phased out.
…
When US president JFK announced the project to reach the moon within a decade in 1962, he famously proclaimed he was doing things “not because they are easy, but because they are hard”.
There has been a lot of commentary about how to measure the cost of renewables – but much of it misses the point
If you’ve been reading or watching any rightwing media of late, you will have heard some extraordinary claims being made about the cost of renewable energy and the transition away from fossil fuels.
The opposition’s energy spokesperson, Ted O’Brien, suggested the Labor government could be “wilfully lying” about the “true cost” of the energy transition, while others have questioned the evidence that solar and wind are the cheapest forms of power.
In the Australian, two columns claimed to have uncovered a fatal flaw in how the cost of solar and wind gets compared with coal, gas and the currently-illegal nuclear.
There is a lot to unpick – but not because any true scandal has been uncovered.
…
The LCOE metric shows clearly that solar and onshore wind are easily the cheapest forms of electricity right now. But Lehmann, and critics she quotes, say it’s misleading because it does not account for the cost of adding transmission lines and storage to the grid that enable those renewables.
A little humility, a mea culpa, I mean I would have accepted an apology from The Guardian for sometimes unintentionally misleading readers.
But I doubt we’ll get any of that from The Guardian. They seem to be set on sailing straight from singing the praises of “the cheapest reliable energy system”, to blaming misconceptions about the cost of renewables on lying politicians.
And that talk of moonshots – that certainly doesn’t sound like the cheapest option.
I wonder how green politicians feel about being thrown under a bus by journalists?
We’re never going to find out, because at the rate this political transformation is going, pretty soon it’s going to be difficult to find any politician who admits they supported renewable energy. Renewables will turn out to be a ghastly mistake, which nobody was responsible for.
Solar panels eat the profits of the reliable generators for lunch
The system is reaching a crisis point and April is turning out to be the month of confessions
His speech was the sound of an industry being tortured. The transition is going backwards. Big projects are stalled. Costs are rising and reliable old assets are being closed too quickly. It’s like we are disassembling the plane as we fly it…
A couple of weeks ago in Australia the chief of Alinta Energy admitted in a big speech that the industry needs to be honest with the public about the costs of the transition. This marks a big shift from the “cheaper and cleaner” misinformation which the renewables industry was practically built on. Jeff Dimery had a stark warning — his company bought a large old coal plant in Victoria for a billion dollars in 2018, and it powers one fifth of Victoria. But to replace that today with renewables would cost $10 billion.
But he also laid bare the crushing effect subsidized rooftop solar PV panels are having on the transition. No news outlets seemed to appreciate the implications of this. Fully one in three Australian homes now has solar panels, but they are all dumping power on the grid at the same time pushing wholesale prices into negative territory that burns the other generators. The midday solar glut, as he calls it, means no one wanted to invest in large scale renewables. But as night follows day, surely that which ruins the market for large scale renewables would also ruin it for large scale fossil fuel plants too? The subsidized solar panels are vandalizing the whole market.
Skeptics who have been predicting this all along, note that the same people who cheered every time a coal plant was struck down are now wading through an impenetrable swamp of their own creation. The same subsidies that hurt coal and gas power, now wipe out the large (subsized) wind and solar plants too. It’s takes some chutzpah to complain about solar subsidies ruining the market for other generators which are also subsidized.
Someone let a plague of solar-locusts on our grid. They eat the profits out of all the reliable providers, which close down. We are actively sabotaging the entire grid — killing off the parts that made it work.
Australians face higher bills as the country struggles to build adequate replacements for coal with soaring costs for new sources of green power and transmission, Alinta Energy chief executive Jeff Dimery has warned.
Mr Dimery said Australian energy stakeholders must be honest with the public about the toll of the transition.
Mr Dimery complains he can’t build anything profitable at $58 a megawatt hour.
“When I sat down to write this speech, the future Victorian energy price for the 2026 calendar year was $58 a megawatt hour,” said Mr Dimery.
“At $58, I can’t build anything to meaningfully prepare for coal to come out of the system. I can’t build more solar, because we already have a glut of solar in the middle of the day, which is sending spot prices deeply negative. If I was just looking at the forward price, I would also be very wary about building new wind, because the margins would be slim to non-existent, and any curtailment – which is a growing problem – could be disastrous.”
If only the energy commentators of Australia could read the same AEMO reports that unpaid bloggers do? Then they’d know that this time last year old brown coal plants were still selling electricity for $15 a megawatt-hour. But Mr Dimery probably knows this, since he owns one of those coal plants, and he didn’t mention it either. (Perhaps he believes in the transition, or perhaps the Hong Kong owners of Alinta might not appreciate that?). He’s being more honest than the other energy chiefs, but Australians need the whole truth. Just what are we giving up by blowing up the old coal plants?
The renewables transition was like a gold rush, but quickly projects started to fail… as Big Government plans do:
11 minutes: I also want to explain what’s caused the drop in investment for large scale renewables. … In the last 5 years the top three gentailers [combined generator-retailers] in this country have collectively written off in excess of $10 billion of shareholder funds. There’s a race to Net Zero but it’s supposed to be for emissions not for profit.
In the early era of renewables Australia had the perfect investment climate for wind solar and pumped Hydro. It could have been seen as the gold rush for renewable generation and certainly we saw no shortage of companies trying to get a piece of the action, but very quickly projects started to fail, loss factors increased and investment cases started to crumble. With a lack of planning and proper infrastructure we quickly found the grid overwhelmed…
Costs are rising rapidly:
15 minutes: Let me tell you why higher cost and uncertainty about recovering those costs that’s why in 2017 Alinta energy developed and built the first big battery in Australia for around $1.5 million per megawatt. Right now we’re building another one that will cost roughly $1.7 million per megawatt . In 2020 it cost around $850,000 to insure a gas fired power plant. Today it’s around $1.75 million — that’s up 40%. I shocked people when I spoke at a conference two years ago and said that it would cost $8 billion to hypothetically replace our Brown Coal fired power station which was acquired for $1.1 billion. Replacing it with pumped hydro and offshore wind today would now cost in excess of $10 billion. That’s up two billion in a mere two years. Developers rightly are afraid to lock in high costs in case they can’t be recovered.
The Alinta chief admits his biggest problem is the glut of solar panels at midday
Everything he says about the problems with massive solar input at lunchtime is true for all the original baseload generators on the grid too. In full honesty he would admit coal plants were not retired because solar and wind were cheap, they were driven out of the market by the subsidy on an essentially irrelevant unreliable form of extra generation that always turned up when we didn’t need it:
18 mins: Without the deployment of new private capital, state and Commonwealth balance sheets simply cannot carry the financial burden we have a glut of daytime rooftop solar energy at the same time that 95%of all large scale renewables are getting curtailed — basically switched Off in some hours of high rooftop solar. The percentage of all energy produced by large scale renewables that was curtailed increased from 10% in the last quarter of 2022 to 13% in the last quarter of 2023. Now you might think 3%, who cares? Well boards care, investors care, and developers care. No one wants to lose 13% of their output and no one dares think just how much more could be lost that could be the difference between profitable and unprofitable. In short, ladies and gentlemen, continued subsidies at one end of the market are driving higher uptake into a glut and undermining the economics of new and existing large scale renewables.
But let’s be real eh? We were happy to destroy the profitability of the old coal plants and the gas plants that taxpayers built, which is what all the subsidized intermittent players did. We’re only complaining now, Mr Dimery, because we care about “renewable” profits.
The solution to the solar panel glut is battery storage
I know how much households love their solar and how important solar is to the transition, but as with any of the intermittent technologies on its own it has pluses and minuses. … the daytime production from rooftop solar needs to be stored and shifted to when it’s required. We’ll need household batteries but they’ll fill up quickly. We’ll need big batteries, and they’ll also fill up quickly too. EV’s will take time to build up to critical mass and for vehicle-to-home and vehicle-to-grid models to alleviate some of the imbalances of homeowners dominating solar and battery installations. We’re exploring other options too like inviting retail customers to be co-investors in wind farms and giving them a portion of the output offset against their bill as well as providing better insights about their appliances via itemized bills that show what’s being spent on heating and cooling and refrigeration.
It’s a solar death spiral
He points out that solar PV owners themselves don’t care about the negative wholesale prices at lunchtime (but in a real market they would).
Rooftop solar is contributing to low energy prices at various times in daylight hours but it isn’t affected by price signals in the same way large scale generators are. It’s a problem we need to solve.
So we subsidize lunchtime solar we don’t need, which makes electricity more expensive for those without solar. Eventually everyone feels they have to buy solar panels, but at the same time the solar glut is driving out the generators we need the other 75% of the day. This is a spiral that only goes down. The end is coming. The subsidy game can’t go on forever.
We need to put real prices on solar panels now, and if that stops all new solar being installed (except in remote locations) so be it. Then we then need to rejig the billing system so those who installed the panels aren’t being subsidized by those who couldn’t afford them. It will take years to unravel this mess.
The land of truth is arriving at the magic renewable tree.
Jeff was a founding member of Australia’s Clean Energy Council, and previously served on the boards of The Renewable Energy Generators of Australia, Australian Energy Council (including as both Chair and Deputy Chair), and the Australian Wind Energy Association.
Alinta owns 3GW of power, gas, wind, coal, and “co-generation” in NZ, and has about 1.1 million retail customers.
Alinta Energy is an Australian electricity generating and gas retailing private company owned by Hong Kong-based Chow Tai Fook Enterprises (CTFE). The sale for $4 billion was approved by TreasurerScott Morrison in 2017.[2] Alinta Energy has an owned and contracted generation portfolio of up to 1,957 MW, approximately 1.1 million combined electricity and gas retail customers and around 800 employees across Australia and New Zealand.[1]
Alinta Energy’s approximately 3,000MW electricity generation portfolio includes:[8]
Global warming, climate change, all these things are just a dream come true for politicians. I deal with evidence and not with frightening computer models because the seeker after truth does not put his faith in any consensus. The road to the truth is long and hard, but this is the road we must follow. People who describe the unprecedented comfort and ease of modern life as a climate disaster, in my opinion have no idea what a real problem is.
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Wie lange wir deine Daten speichern
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Für Benutzer, die sich auf unserer Website registrieren, speichern wir zusätzlich die persönlichen Informationen, die sie in ihren Benutzerprofilen angeben. Alle Benutzer können jederzeit ihre persönlichen Informationen einsehen, verändern oder löschen (der Benutzername kann nicht verändert werden). Administratoren der Website können diese Informationen ebenfalls einsehen und verändern.
Welche Rechte du an deinen Daten hast
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Wohin deine Daten gesendet werden
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