The ‘magical thinking’ of renewable energy

The ‘magical thinking’ of renewable energy

The right-wing think tank, the Manhattan Institute, recently published a report titled THE “NEW ENERGY ECONOMY”: AN EXERCISE IN MAGICAL THINKING.

The report is a direct response to the ‘Green New Deal’ (GND) recently proposed in the US.

For those who are unaware, the Green New Deal is a combination of measures that seek to address global warming and economic equality in the US. It’s meant to capture the spirit of the ‘new deal’, a series of programs instituted during the Great Depression by US President Franklin D. Roosevelt that aimed to restore prosperity.

The GND is peddled by a far-left group within the left-wing Democrats who identify as Democratic Socialists and seeks to eliminate coal, gas, biomass and nuclear power in favour of wind, solar and batteries. Not dissimilar from the ‘Greens’ party here in Australia, though there is also a another, separate Green Party in the US.

The report, authored by the eminently qualified Mark P. Mills, is direct and succinct and provides a set of examples in layman terms of why there is no possibility that the world is undergoing—or can undergo—a near-term transition to a “new energy economy.”

Renewables advocates will immediately attempt to dismiss the report because it’s written by their ‘opponents’. That’s a logical fallacy (link-poison well). Logical fallacies are only used if you don’t have a reasoned counter-argument.

Left-right politics isn’t going anywhere soon. We can’t avoid it. But maybe we can at least filter it and seek to monitor our own bias and form opinions based on data rather than logical fallacies, and maybe even change our minds when presented with new information.

Unfortunately, when it comes to engineering, most of the populace don’t have the education or interest to understand or verify the claims of renewables advocates.

Which is why this report is so refreshing. It arms the reader with digestible knowledge and the all-important context in layman terms, so there’s no escape to the relative cognitive safety of well-intentioned belief. It forces one to confront the reality of what it actually means to ‘go green’ in the context of an affordable, reliable energy system, rather than the ‘magical’ thinking that scale and cost is no longer an issue and all we need it the political will to make the transition.

The exec summary nails several points:

  • Scientists have yet to discover, and entrepreneurs have yet to invent, anything as remarkable as hydrocarbons in terms of the combination of low-cost, high-energy density, stability, safety, and portability. In practical terms, this means that spending $1 million on utility-scale wind turbines, or solar panels will each, over 30 years of operation, produce about 50 million kilowatt-hours (kWh)—while an equivalent $1 million spent on a shale rig produces enough natural gas over 30 years to generate over 300 million kWh.
  • Solar technologies have improved greatly and will continue to become cheaper and more efficient. But the era of 10-fold gains is over. The physics boundary for silicon photovoltaic (PV) cells, the Shockley-Queisser Limit, is a maximum conversion of 34% of photons into electrons; the best commercial PV technology today exceeds 26%.
  • Wind power technology has also improved greatly, but here, too, no 10-fold gains are left. The physics boundary for a wind turbine, the Betz Limit, is a maximum capture of 60% of kinetic energy in moving air; commercial turbines today exceed 40%.
  • The annual output of Tesla’s Gigafactory, the world’s largest battery factory, could store three minutes’ worth of annual U.S. electricity demand. It would require 1,000 years of production to make enough batteries for two days’ worth of U.S. electricity demand. Meanwhile, 50–100 pounds of materials are mined, moved, and processed for every pound of battery produced.

Unfortunately, it’s incredibly rare that renewable advocates and the mainstream media report the real challenges in such clear terms, perpetuating confusion and building false expectations that an affordable, reliable transition to 100% renewables is imminent and inevitable.

The desire to push renewables as a ‘cheap’ and ‘inevitable’ is understandable but relies on biased reporting at best and misrepresentation at worst.

It mixes real data with false or incomplete information to lead the reader to a biased conclusion.

So, what are the barriers to wind, solar and batteries replacing coal, natural gas and nuclear?

The report focuses on a range of key concepts, including:

  1. The Scale Challenge
  2. The physics-driven cost (and limits) of wind, solar and batteries
  3. The hidden costs of a ‘green’ grid

It even includes a version of a graph we’ve published previously showing how high penetration of wind and solar correlate with higher electricity prices.

The key takeaways from the report:

Scale matters – renewables advocates want us to think that ‘political will’ is the only really barrier to ditching hydrocarbons. It’s not. As the report states:

“… transforming the energy economy is not like putting a few people on the moon a few times. It is like putting all of humanity on the moon—permanently.”

Limits matter – wind, solar and batteries have limits placed on them by nature. As do hydrocarbons. But there is a huge disparity in making use of the ‘raw; energy source.

The hidden green costs

For hydrocarbons, one necessarily spends money on a generator to convert the fuel into grid electricity. For wind and solar, spending is required for some form of storage to convert unreliable electricity into utility-grade, 24/7 power.

When it comes to modern power grids, reliability is the single most important requirement, followed by affordability. Remember, to be environmentally sustainable a solution must first be economically sustainable.

Hydrocarbons are relatively easy and cheap to store. It costs less than $1 to store the equivalent of one barrel of oil or gas for several months. Even less for coal. Conversely, it costs more than $200 with current battery technology.

As a matter of geophysics, wind and solar produce energy, averaged over a year, about 25%–30% of the time, often less. Conversely, conventional power plants, have very high “availability,” in the 80%–95% range, and often higher.

Grid size differences are never explained:

“A wind/solar grid would need to be sized to meet both peak demand and to have enough extra capacity beyond peak needs in order to produce and store additional electricity when sun and wind are available. This means, on average, that a pure wind/solar system would necessarily have to be about threefold the capacity of a hydrocarbon grid: i.e., one needs to build 3 kW of wind/solar equipment for every 1 kW of combustion equipment eliminated. That directly translates into a threefold cost disadvantage, even if the per-kW costs were all the same.”

Are wind and solar really as cheap or cheaper than hydrocarbons?

The Levelised cost of Energy (LCOE) is the usual form of comparison.

In the US, the electricity from a wind turbine or solar array is calculated as 36% and 46%, respectively, more expensive than from a natural-gas. The US is lucky because their gas is cheap and abundant, something we don’t enjoy here in Australia.

However, there is a caveat that renewables advocates ignore when attempting to claim a cost advantage over hydrocarbons.

“The LCOE calculations do not take into account the array of real, if hidden, costs needed to operate a reliable 24/7 and 365-day-per-year energy infrastructure—or, in particular, a grid that used only wind/solar.”

“The LCOE considers the hardware in isolation while ignoring real-world system costs essential to supply 24/7 power”

Then there are the costs associated with wind and solar deployment, but never attributed directly to their cost:

  • Subsidies
  • Mandates
  • Backup generators
  • Batteries
  • Cost of lower coal and gas plant utilisation

The report offers a simple way to understand this issue:

“… managing grids with hidden costs imposed on non-favoured players would be like levying fees on car drivers for the highway wear-and-tear caused by heavy trucks while simultaneously subsidising the cost of fuelling those trucks.”

Batteries, though touted as the answer to variable wind and solar, are woefully inadequate:

$200,000 worth of Tesla batteries, which collectively weigh over 9,000kg, are needed to store the energy equivalent of one barrel of oil. A barrel of oil, meanwhile, weighs 136kg and can be stored in a $25 tank. Those are the realities of today’s lithium batteries. Even a 200% improvement in underlying battery economics and technology won’t close such a gap.

These scale and cost challenges need to be solved if the rapid transition to a new energy economy is to be realised.

Some have hard limits grounded in physics which can’t be overcome.

Think of the evolution of long-distance transport.

For thousands of years the science and art of ship building advanced, from human propulsion, to harnessing the wind then fossil fuels.

The speed of ships increased as science developed new materials that were lighter and stronger. The ideation and implementation of hull designs advanced until they hit the limits imposed by physics.

For human or wind powered ships, their speed could rarely, if ever, exceed their hull design (1.34 x sqr of the waterline length = max speed in knots).

The size of ships grew and in the late 1700’s could reach speeds of 30kmh.

As with most advancements, the point of diminishing gains for wind-propelled sea travel was reached.

In the 19th century, the revolutionary and disruptive technology of steam propulsion saw the rapid demise of wind propulsion.

By 1838, steam had cut the Atlantic crossing from weeks to 19 days. The 1884 invention of the steam turbine was the final nail in the coffin for the 4000-year domination of wind propulsion.

All R&D had previously focused on refining the hull dimensions and shape, the configuration of sails, the development of steam and so on, but the speed and efficiency of mass transport over distance had peaked.

The physical parameters of sea travel had been reached.

The fastest Yachts couldn’t carry many people or provisions. The large ships capable of transporting people and goods en masse around the world weren’t very fast in comparison.

This is analogous to the current state of cost and efficiency gains for wind and solar power generation; they are increasingly marginal.

In the case of seaborne travel, a whole new approach was required; it was powered flight.

Flight was an alternative means of travel utilising a different, more efficient set of physical parameters based on the movement of a vessel through the air, rather than water. Coupled with the tremendous energy density of oil and the relative conversion efficiency of that chemical power to mechanical power and thrust, and we have a quantum leap in transportation.

Both sailing and flight accomplish the objective of getting from point A to point B. What took sailing 4000 years to accomplish in terms of its development and refinement, flight has done in less than 100 years.

Flight transports people more efficiently and cost effectively than sea travel. Though sea transport is still more cost effective for non-time sensitive bulk cargo.

Reverting from hydrocarbons to wind and solar is like reverting from air to sea travel.

Trying to wring more energy out of wind and solar is the energy equivalent of trying to design a faster hull or sail; we’re still constrained by the force of the wind and the drag of the hull.

To deliver a rapid and complete transition from hydrocarbons to renewables is not impossible, but we can’t do it under the illusion that it won’t cost a lot nor entail significant sacrifices if we choose wind, solar and batteries over oil, gas, coal and nuclear.

Realistically, the transition will take decades and will likely require a similar paradigm shift that took us from the sea to the air. At this stage, fusion energy is the leading candidate.

The report concludes with a mention of the much-hyped project by Google back in 2011 to assemble the world’s best engineers to ‘crack the code’ on making renewable energy cheaper then coal (RE<C).

The RE<C project was closed in 2014, with the engineers rediscovering the very physics highlighted in the report, stating:

Incremental improvements to existing [energy] technologies aren’t enough; we need something truly disruptive. … We don’t have the answers.”

Here at ECT, we know that innovation and advancement will ultimately deliver solutions. We also know that will take time. Meanwhile, nations with lignite will continue to use that resource.

Developed nations will seek higher value uses such as conversion of lignite to fertiliser, hydrocarbon gas and liquids or hydrogen. Developing nations will seek to continue to use lignite for affordable, reliable baseload power generation as they seek to generate the higher incomes needed to afford wind and solar.

Far from being ‘wishful thinking’, our Coldry technology is an immediate solution to reducing the CO2 intensity of lignite use in electricity production or as a feedstock for conversion to higher-value hydrocarbon products.

And our Matmor technology is capable of reducing the CO2 intensity of primary iron production, while remediating low-value iron ore fines.