Friday, March 25, 2022

Debunked: the great green renewables delusion


By Patrick Benham-Crosswell

ONE of the great lines of the proponents of renewable power is that the input energy (mostly wind and solar) is free, therefore producing renewable energy is less expensive that from fossil fuels. Even though wind isn’t always available and therefore needs some back-up power – usually gas fired – the more wind generation there is the less gas will be needed and therefore the cheaper energy will be.

There’s just one problem: that’s not what the evidence shows. The reality is that there is a close correlation between the amount of wind generation and the increasing price of electricity. More renewables makes electricity more expensive.

I’ll prove it. The graph below comes from government data (the BEIS DUKES data set and the Asset publishing service). 

The grey line is the gas price for a large user (in p/kWh). Over the 14 years of the chart it’s pretty much the same.

The green line is the proportion of electricity from renewables (excluding nuclear). The great rush for renewables has certainly delivered an impressive amount of capacity.

The purple line is the ratio of the non-domestic electricity price to the gas price. (I’ve used the non-domestic price to avoid price caps distorting the truth). This tells us that up to 2013 a kWh of electricity was about four times the cost of a kWh of gas.  That’s not surprising, it takes about 2.5 kWh of gas to make one kWh of electricity and of course there are the operating and capital costs of the power plant to consider, plus the transmission costs.

Yet since 2013 the proportion of renewable electricity has trebled, but electricity is now seven times as expensive as gas. Greta’s gang will scream ‘Correlation is not causation!’ Fair enough; what could have caused this, then?

It can’t be the gas price, because that was pretty much constant.

The gas power stations are still there, so they still have costs. But now they are used 30 per cent less. If they were running 8,000 hours a year in 2004 they’re running 5,600 hours a year now. While this reduces the amount of (then) cheap gas that they need, it doesn’t alter the fixed costs, which now have fewer hours to be recovered so the fixed cost per hour increases. Who pays? You do.

That’s not all. There are the subsidies hidden in the Climate Change Levy. The subsidy regime for electricity generation is almost impenetrably complex. (The theory behind them was to encourage investors to take the risks of new technologies by guaranteeing that they would make a profit. Wind and solar are hardly new any more – but that’s an argument for another day). Fortunately the subsidy regime has been unpicked by the Renewable Energy Foundation who have produced the chart below. The subsidy rate for electricity is increasing, even though the technology is mature. The risks have decreased but the rewards remain. Who pays? You do.

It gets worse. There is a dynamic market for electricity which ensures that when you flick a switch the power flows. This market is competitive, the electricity companies buy from the lowest priced supplier. If there is a shortfall, as there increasingly is if the wind doesn’t blow (or the sun doesn’t shine) as anticipated, the gas generators can charge huge amounts.  ... Continue reading >>> EXPLORE OUR PAGES:

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Niall Ferguson On Misunderstanding History: "Biden Is Making A Colossal Mistake"


Authored by Niall Ferguson, op-ed via,

Biden is making a colossal mistake in thinking he can bleed Russia dry, topple Putin and signal to China to keep its hands off Taiwan...

“The language people speak in the corridors of power,” former Secretary of Defense Ashton Carter once observed, “is not economics or politics. It is history.”

In a recent academic article, I showed how true this was after both the 9/11 terrorist attacks of 2001 and the “9/15” bankruptcy of Lehman Brothers in 2008. Policy makers used all kinds of historical analogies as they reacted. “The Pearl Harbor of the 21st century took place today,” President George W. Bush noted in his diary, late on the night of the attacks, to give just one example, though many other parallels were drawn in the succeeding days, from the Civil War to the Cold War.

Seven years later, Federal Reserve Chair Ben Bernanke and New York Fed President Tim Geithner were the first members of the Federal Open Market Committee to appreciate that, without drastic measures, they risked re-running the Great Depression.

What kind of history is informing today’s decisions in Washington as the war in Ukraine nears the conclusion of its first month? A few clues have emerged.

“American officials are divided on how much the lessons from Cold War proxy wars, like the Soviet Union’s war in Afghanistan, can be applied to the ongoing war in Ukraine,” David Sanger reported for the New York Times on Saturday.

According to Sanger, who cannot have written his piece without high-level sources, the Biden administration “seeks to help Ukraine lock Russia in a quagmire without inciting a broader conflict with a nuclear-armed adversary or cutting off potential paths to de-escalation … CIA officers are helping to ensure that crates of weapons are delivered into the hands of vetted Ukrainian military units, according to American officials. But as of now, Mr. Biden and his staff do not see the utility of an expansive covert effort to use the spy agency to ferry in arms as the United States did in Afghanistan against the Soviet Union during the 1980s.”

Reading this carefully, I conclude that the U.S. intends to keep this war going. The administration will continue to supply the Ukrainians with anti-aircraft Stingers, antitank Javelins and explosive Switchblade drones. It will keep trying to persuade other North Atlantic Treaty Organization governments to supply heavier defensive weaponry. (The latest U.S. proposal is for Turkey to provide Ukraine with the sophisticated S-400 anti-aircraft system, which Ankara purchased from Moscow just a few years ago. I expect it to go the way of the scuttled plan for Polish MiG fighters.) Washington will revert to the Afghanistan-after-1979 playbook of supplying an insurgency only if the Ukrainian government loses the conventional war.

I have evidence from other sources to corroborate this. “The only end game now,” a senior administration official was heard to say at a private event earlier this month, “is the end of Putin regime. Until then, all the time Putin stays, [Russia] will be a pariah state that will never be welcomed back into the community of nations. China has made a huge error in thinking Putin will get away with it. Seeing Russia get cut off will not look like a good vector and they’ll have to re-evaluate the Sino-Russia axis. All this is to say that democracy and the West may well look back on this as a pivotal strengthening moment.”

I gather that senior British figures are talking in similar terms. There is a belief that “the U.K.’s No. 1 option is for the conflict to be extended and thereby bleed Putin.” Again and again, I hear such language. It helps explain, among other things, the lack of any diplomatic effort by the U.S. to secure a cease-fire.  It also explains the readiness of President Joe Biden to call Putin a war criminal.

Now, I may be too pessimistic. I would very much like to share Francis Fukuyama’s optimism that “Russia is heading for an outright defeat in Ukraine.” Here is his bold prediction from March 10 (also here):

The collapse of their position could be sudden and catastrophic, rather than happening slowly through a war of attrition. The army in the field will reach a point where it can neither be supplied nor withdrawn, and morale will vaporize. … Putin will not survive the defeat of his army … A Russian defeat will make possible a “new birth of freedom,” and get us out of our funk about the declining state of global democracy. The spirit of 1989 will live on, thanks to a bunch of brave Ukrainians.

From his laptop to God’s ears.   ... Continue reading >>>

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