Economics, Energy and the Environment

Sound the retreat!

As I pointed out earlier this year, European countries that hitched their economic wagons to the whole low-carbon/green-energy idea haven’t been finding much success with it. That’s not a surprise, as writers such as Robert Bryce, Vaclav Smil, Steve Hayward, and I have long pointed out that the problem with green energy isn’t the lack of will, it’s the physics and the economics: wind and solar power are low-density, highly intermittent forms of energy that require highly responsive backup power, expanded distribution systems, and large-scale storage systems to be made useful. Despite the claims of rent-seekers and environmentalists, they are not now, and never have been competitive with fossil fuels on a cost per unit-of-power basis; there was never any realistic prospect of them scaling to displace a major component of a modern society’s energy use; and they are not without their own environmental problems that people find troubling.

What is surprising is how quickly the low-carbon/green-energy fantasy is unraveling. As Benny Peiser of the UK’s Global Warming Policy Foundation points out in their email bulletin today:

There was growing speculation last night that the Government is on the verge of cutting multibillion-pound financial incentives to build [onshore] wind farms. It is believed that the Government could cut so-called ROC incentives for green energy projects as a means of keeping a lid on rising power prices.—Robert Lea, The Times, 19 October 2011

Spain’s Industry Ministry has upset the country’s burgeoning wind power sector by announcing that it intends to slash subsidies by 40 percent. The draft royal decree on feed-in tariffs for wind energy which is currently being debated in parliament is endangering €12.7 billion of investments in Spain planned for the period up to 2020, says the AEE.—Reve News, 20 October 2011

Japan is reconsidering plans to cut carbon-dioxide emissions by 25 percent by 2020 due to a rethinking of its energy future, and the country is worried that it is spending too much on carbon-credit programs, a senior government official said on Wednesday. “Japan’s wealth has been draining out” due to buying carbon credits from East European countries and China, Mr. Nobutani said. METI estimates Japan has paid as much as ¥800 billion ($10.4 billion) to buy 400 million metric tons of carbon credits.—Mari Itawa, The Wall Street Journal, 19 October 2011

Clearly, things are reaching critical mass in the countries that have signed onto the whole “low-carbon future” mentality.

It’s rare to see something that was as “destined” as the “green-energy revolution” come apart quite so quickly in real time. Japan’s nuclear disaster, the tanking global economy, and the shale gas revolution are undoubtedly part of it, but my guess is that the internets are a bigger part: it’s harder and harder to hide spectacular boondoggles in a world of such open and high-bandwidth communication and social networks.

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