A recurring theme right here at Manhattan Contrarian is that the “good” individuals who search to run the world are usually not actually very good. They could have gotten excessive scores on the SATs, they usually could have attended fancy universities, however with regards to sensible information of how the world works, they’re usually full idiots.
A particular case of this phenomenon is that the very best gurus of excessive finance — the people who find themselves most trusted to have mastered fundamental numeracy, and who get to cross out trillions of {dollars} of public funds — are fully innumerate.
I come to this subject at the moment on account of the recently-completed briefing in CHECC v. EPA, the DC Circuit case difficult EPA’s “discovering” that atmospheric CO2 is a “hazard to human well being and welfare.” The group difficult the Endangerment Discovering, the Involved Family Electrical energy Shoppers Council, asserts standing on the bottom that growing the quantity of photo voltaic and wind “renewable” technology on the grid essentially drives up shopper electrical energy payments. The the reason why that is so have been mentioned many instances on this weblog. Maybe probably the most detailed dialogue seems within the Articles part, titled “The Disastrous Economics Of Attempting To Energy an Electrical Grid With 100% Intermittent Renewables.” This topic does require some thought to grasp, however definitely no superior math. The principle level is that intermittent renewables can’t energy a grid on their very own, and as their grid penetration will increase, giant quantities of some mixture of backup, storage, and overbuilding are required, all of which add to the price of the system. All of that is simply demonstrated with fundamental arithmetic. Anybody who efficiently completed the sixth grade ought to grasp it instantly.
As apparent because the conclusion of accelerating electrical energy costs could also be, our authorities, represented by EPA and the Justice Division, both claims, or pretends, to not acknowledge that conclusion. Might seemingly good individuals actually be so dense?
Properly, take into account the case of the IMF, the Worldwide Financial Fund. These are the individuals on the prime of the information pyramid of worldwide finance. They get a whole bunch of billions of {dollars} of funding from governments in developed international locations, and are given the authority at hand out these funds, not to mention to coach and instruct governments in creating international locations how one can run their economies and their financial insurance policies appropriately. This financial coverage stuff is all arithmetic, a few of it pretty sophisticated. Certainly, if anybody on this planet can do fundamental arithmetic, these are the individuals.
So take into account the piece from the IMF’s on-line journal Finance & Growth by Bob Keefe, from December 2022, titled “The Value of Power Insecurity.” In keeping with this man, wind and photo voltaic are the apparent path to cheap electrical energy:
[T]hanks to earlier insurance policies and the advance of know-how, photo voltaic and wind are the most affordable sources of energy accessible in most elements of the world. Electrical automobiles are cheaper to function, particularly when fuel costs soar. Power-efficient merchandise—LED lighting, high-efficiency warmth pumps and scorching water heaters, and higher home windows and insulation—can save shoppers and companies cash with each month-to-month energy invoice. And making clear power at residence, from gas that’s free for the taking, makes a nation safer.
And it’s not simply Keefe and the IMF who’ve gotten the message. EU Fee President Ursula von der Leyen is totally on board:
“Ending our dependency on Russian fossil fuels is simply step one,” [von der Leyen] mentioned on the Bled Strategic Discussion board in Slovenia. “The skyrocketing electrical energy costs at the moment are exposing, for various causes, the constraints of our present electrical energy market design. It was developed below fully completely different circumstances and for fully completely different functions. It’s now not match for goal.”
And don’t neglect concerning the World Financial institution, the IMF’s companions in world excessive finance. From the World Financial institution’s “Power” web page, September 26, 2022:
Renewables Are the Key to Inexperienced, Safe, Inexpensive Power. Renewable power may help international locations mitigate local weather change, construct resilience to risky costs, and decrease power prices—that is particularly important now as spiking fossil gas prices are debilitating poor power importing international locations. Photo voltaic and wind applied sciences can turn into a recreation changer for a lot of creating international locations as photo voltaic and wind are considerable, cost-competitive, and a supply of dependable energy when mixed with battery storage.
Or, from the UN’s Worldwide Renewable Power Company, July 13, 2022:
“Renewable Energy Era Prices in 2021,” revealed by the Worldwide Renewable Power Company (IRENA) at the moment, reveals that just about two-thirds or 163 gigawatts (GW) of newly put in renewable energy in 2021 had decrease prices than the world’s least expensive coal-fired choice within the G20. IRENA estimates that, given the present excessive fossil gas costs, the renewable energy added in 2021 saves round USD 55 billion from world power technology prices in 2022.
So what is occurring in the actual world? A man named Mike Jonas at Watts Up With That yesterday has compiled the most recent knowledge that he may discover on the connection between wind and photo voltaic penetration in major power consumption in a rustic versus shopper electrical energy costs. The wind/photo voltaic technology % knowledge come from 2021; the buyer electrical energy costs are from June 2022. Right here is the chart:
Commenters at WUWT level out, appropriately, that this chart hides many issues, significantly the extent to which every nation both lowers shopper electrical energy prices with large subsidies, or raises them by embedding taxes. Nonetheless, the sturdy correlation between growing wind/photo voltaic penetration and growing shopper costs is evident.
To me one of the vital hanging issues concerning the chart is the low degree of penetration of wind- and solar-based electrical energy in major power consumption in each nation, even after a long time of large subsidies and excessive political stress to “save the planet” by the use of an power transition. The one nation that has gotten materially previous 15% wind/photo voltaic power manufacturing is Denmark at about 24%; and that’s at a price of shopper electrical energy costs effectively over 50 cents/kWh — about 5 instances the U.S. common value. (Commenters level out that Denmark has unusually excessive quantities of taxes embedded in electrical energy costs, however it could nonetheless be an outlier with out them.). Germany and the UK, after a few years of huge subsidies and a rare push towards inexperienced power have solely achieved 10% and 12% respectively of major power from wind and photo voltaic, with electrical energy costs over 4 instances the typical U.S. degree. Greece appears to be some sort of a finest case for wind and photo voltaic, with shut to fifteen% penetration and electrical energy costs lower than double the U.S. common; however take a look at this Reuters piece about Greece’s huge subsidies to decrease costs to shoppers.
I received’t declare that the ultimate actual world outcomes are but in. But when wind and photo voltaic may really present dependable electrical energy for decrease value than the fossil gas various, this chart would present correlation with a straight reverse slope. Let’s see some nation obtain 50%, or for that matter 85% of major power from wind and photo voltaic (as many international locations are supposedly promising by 2050), and let’s see what the prices are.
For the total put up learn right here.
