Progress towards an energy transition appears to be significantly lagging the optimistic projections and any reduction in government mandates and subsidies could make many investments unprofitable, and at least some elements of the energy transition appear to be driven by irrational exuberance – Michael Lynch, Energy Policy Research Foundation, 2022
The loudening insistence that renewables should displace, not just supplement, fossil fuels and nuclear energy in the power sector has some undeniable problems.
In electricity jargon, politically favored wind and solar power are “non-dispatchable” resources (with capacity factors lower than 35%), while fossil fuels and nuclear are “dispatchable” (with capacity factors 85% and higher). This means that cost comparisons between wind and solar (intermittent, usually unavailable) versus fossil fuels and nuclear (baseload, almost always available) are much more imaginary than real.
And much more wind and solar faces the growing obstacle of “high grading,” where the best spots (the low-hanging fruit) get picked first. In other words, each incremental build for wind and solar farms will, naturally, be in areas that are less windy and less sunny because their best locations are finite.
Cloudy Germany, for instance, made the major mistake of over-focusing on solar power.
As reported by Bloomberg last July, wind power in sweltering Texas was performing at just 8% of its capacity, and frequently much lower than that – as it turns out, the wind doesn’t blow when it’s 100 degrees outside.
This means that for wind and solar to displace 2,000 megawatts of gas or coal capacity, for instance, around 8,000 megawatts or even more are required.
But it’s impossible to even calculate that number since wind and solar are naturally intermittent and thus, naturally, unpredictable.
Indeed, advocates love to cite capacity additions for wind and solar, but it’s only actual generation and power-portfolio penetration that matter.
In the competitive energy marketplace, usually unavailable “alternatives” are much more “supplemental” when it comes to displacing fossil fuels and nuclear.
And as we saw last year, costs for wind and solar can often rise (up 34% in 2022), not always declining like advocates insist, due to surging prices for the raw materials that comprise them (supply chains disastrously controlled by China).
Demand for these raw materials is growing fast globally, so it’s a safe bet that costs for renewables and batteries will be much higher than currently projected.
Germany and California, the world’s two “greenest governments” over the past 20 years, are needing much more natural gas than they ever said they would.
Germany is now looking to build at least eight liquefied natural gas (LNG) import terminals to “get away from Putin’s gas,” which it also promised that it would do a long time ago.
And the German government admits that now ending the nuclear power fleet will mean greater reliance on more reliable coal and natural gas, not more wind and solar.
California utilized natural gas to generate over 60% of power during its heat wave late last summer – when smoke from wildfires blocked solar panels from performing.
We already know what climate-focused policies bring: Germany has the highest electricity prices in the world, and California’s are the highest in the continental U.S., some 75% above the U.S. average.
They promised us that it would be all so different.
The renewable build-out is facing another giant obstacle in getting the transmission lines built to get them onto the U.S. power grid. The very green Rocky Mountain Institute says that we will need to double or even triple the size of our transmission grid to make huge amounts of wind and solar viable.
At current growth rates, that would take over 200 years.
Along with their desperately needed but expensive battery-storage projects, wind and solar power generators wait in yearslong lines to come onto the grid, and then they face huge interconnection fees that they simply can’t afford.
The interconnection application process takes an incredibly long time, and more wind and solar require major upgrades to the grid, which are often so expensive that power generators are forced to back out.
The Federal Energy Regulatory Commission reports that the vast majority of wind and solar projects in the works today will never see the light of day.
Even when looking at our two most progressive states for energy policy, the progress made is paltry: “the California Independent System Operator region has an 13% completion rate and the New York Independent System Operator region is at 15%.”
And then there is the widening NIMBY opposition against the wind and solar build-out, explaining why JP Morgan’s CEO Jamie Dimon disturbingly wants the U.S. government to seize private land to install more wind and solar farms.
Land-devouring wind and solar farms are every bit as unwanted as the oil and gas pipelines that renewable advocates love to hate.
That Renewable Rejection Database is mounting much quicker than the Biden administration apparently realizes.
And if our weather is becoming less and less predictable, as we are often told, how is it that we are setting ourselves up to be increasingly reliant on weather-dependent electricity?
I’m truly not understanding that part. We’re heading for a train wreck.
President Biden’s offshore wind goal of 30,000 megawatts by 2030 is likely to prove unachievable and astronomically expensive.
Green California, for instance, has no offshore wind capacity whatsoever, but it’s insisting that wind power will play an integral role in achieving climate goals.
The CEO of NextEra, the world’s largest renewable-power generator, calls offshore wind a bad bet.
We must be very careful here, and we will likely need all resources because climate policy is making electricity even more essential in our economy. Power must be both affordable and reliable.
Nobody loves the Biden administration’s new EPA regulations to force huge amounts of electric cars onto the power grid more than the beleaguered coal industry.
Electric cars and the overarching goal of electrification will surely surge U.S. electricity demand, a sector that has been flat at 4,100 terawatt hours since the Great Recession 15 years ago (see figure).
Ultimately, renewables and electric cars share the same outlook: “growing markets but nowhere near taking over the market.”
Physics and higher than expected costs (e.g., only 10-15% of Americans can now afford an electric car) will ensure that many of the policies we’re hearing about today will be pulled back and/or drastically watered down.
When the rubber hits the road, energy dreams die hard: “Despite climate commitments, the EU is going back to coal.”
The lavish, wasteful subsidies for renewables and electric cars are bound to become politically untenable at some point: “Ford Is Losing $66,446 On Every EV It Sells.”
Indeed, after promising “no more drilling” during his presidential campaign, President Biden has a newfound affinity for the reliable resources that meet 80% of our energy needs: “Another big Alaska fossil fuel project gets Biden team’s blessing.”
And just a few weeks ago, the Biden administration gave approval to two more giant projects to export natural gas, Texas LNG and Rio Grande LNG.
It turns out that Vladimir Putin’s war has brought the sleepwalking West the great energy reality check that it so desperately needed – and that includes even the most “climate ambitious administration in U.S. history.”
see SDGE study here
Jude Clemente is the Editor at RealClearEnergy.
