There can be no disputing the fact that despite rising atmospheric carbon dioxide levels, global climate temperatures have been flat for at least the past 16 years, and perhaps a good deal longer. And upon issuing its latest Summary for Policymakers Report (AR5), the UN’s Intergovernmental Panel on Climate Change (IPCC) has finally been forced to admit that its climate models that predicted an impending global warming crisis have grossly overestimated climate sensitivity to carbon dioxide, a trace “greenhouse gas”.
Such unwarranted alarmism has influenced colossally costly and economically destructive anti-fossil energy policies in the United States, Western Europe, Australia, and other regions of world. The question now remains how long it will take before broad segments of these populations realize that they have been duped by unaffordable and unreliable climate benefit-premised “Green energy” promotions.
High Costs of Political Science
Dr. Fritz Vahrenholt, a socialist and one of the fathers of Germany’s environmental movement, is now one of many adamant IPCC report critics. Vahrenholt, who had headed the renewable energy division of RWE, that country’s second largest utility company, has co-authored a blockbuster book titled, The Neglected Sun: Why the Sun Precludes Catastrophe, which challenges IPCC’s competence in general — and its gross (more than double) exaggeration of CO2 warming influence in particular. Now available in an English translation version, the book is currently the number one best seller in the Amazon climate category.
Dr. Vahrenholt’s lack of trust in the IPCC’s objectivity and veracity first took root when he became an expert reviewer for their 2011 report on renewable energy and discovered numerous errors. When he pointed out the inaccuracies to IPCC, their officials simply brushed them aside. Stunned by this, he asked himself: “Is this the way they approached climate assessment reports?” Then, after digging into the IPCC’s climate report, he was horrified to discover that his suspicions were true.
When I queried Vahrenholt regarding what he thinks about the IPCC’s latest report finding its scientists to be 95% certain that humans caused most of the recent non-warming, he offered some advice: “If Mother Nature’s conclusions differ from IPCC’s tweaked calculations, then always believe your mother.” I’m 100% in agreement with him.
Fritz Vahrenholt recognizes the great danger Germany faces if it continues down its present climate alarmism-premised renewable energy path. This is already costing consumers 20 billion euros every year (250 euros per household), which will increase to 300 euros per household next year. He points out: “On windy days we have so much power that wind parks are asked to shut down, yet they get paid for the power they don’t even deliver. And when the wind really blows, we ‘sell’ surplus power to neighboring countries at negative prices. And when the wind stops blowing and when there is no sun, we have to get our power from foreign countries. In the end we pay with the loss of high-paying industrial jobs because the high price of power is making us uncompetitive.”
Dr. Vahrenholt concludes, “The agitators in climate science here in Germany have done us no favors. Renewable energies do have a big future, but not like this. It’s been a runaway train and it’s too expensive. We are putting Germany’s industry in jeopardy.”
German energy conditions will likely worsen following the re-election of Chancellor Angela Merkel’s conservative Christian Democratic Union, which plans to continuously wean the country off of fossil fuels and nuclear power. Her popular victory is seen as a rebuff of those who have argued that she has pushed too hard for expensive “clean energy”.
As Fritz Vahrenholt told me, this shift from fossils to renewables produces a double subsidy whammy. He explains, “As the renewables replace the fossils, more and more gas- and coal-fired stations are running out of profitability because their production times have to be cut. So the utilities are planning to close 10,000 MW of fossil fuel plant capacity which are needed in the night and winter, when the sun is not shining, or when the wind is not blowing. Accordingly, the plan is to provide a capacity subsidy for the gas and coal plants. They would be paid for not producing when they are standing by.” The lesson in all of this, he said, is “if you destroy the market by a subsidy, you then need another subsidy to keep the systems from breaking apart.”
German households now pay the second highest power costs in Europe, as much as 30% more than other Europeans. Only the Danes pay more, and both countries pay roughly 300% more for residential electricity than we Americans do. Slightly more than 12% of Germany’s electricity now comes from wind (7.8%) and solar (4.5%). Biomass provides 7%, and hydro 4%. Since the government plans to increase that renewables proportion to 35% by 2020, and to 80% by 2050, most of that must come from wind and solar because biomass and hydro won’t grow.
Yet despite huge investments, German wind has produced only about one-fifth of its installed capacity. Ironically, since shutting down some of its older nuclear plants in response to the nuclear accident in Japan, Germany now has to import nuclear power from France and the Czech Republic.
To help compensate for this shortfall, the Germans placed their hopes on offshore wind, which is less intermittent than onshore installations but even more expensive due to much higher construction, maintenance, and power transmission costs. While half a dozen wind farms are still being built in the North Sea, there are no followup contracts. As Ronney Meyer, managing director of Windenergie Agentur (EWE) based in the northern port city of Bremerhaven, said, “The market has collapsed.” EWE developer Riffgat reportedly doesn’t plan to invest in any more offshore turbines.
Denmark, which allegedly produces between 20% to 30% of its electricity from wind and solar (estimates vary), hopes to produce half from those sources by 2020. Why “allegedly? Because there’s a big difference between the amount of electricity produced and the amount that makes a difference in meeting consumer demands when needed. To illustrate this, a 2009 study reported by CEPOS, a Danish think tank, found that while wind provided 19% of the country’s electricity generation, it only met an average 9.7% of the demand over a 5-year period, and a mere 5% during 2006.
Since Denmark can’t use all the electricity it produces at night, it exports about half of its extra supply to Norway and Sweden, where hydroelectric power can be switched on and off to balance the grids. Still, even with those export sales, government wind subsidies cause Danish customers to pay the highest electricity rates in Europe.
In 2011, U.K. wind turbines produced energy at about 21% of installed capacity (not demand capacity) during good conditions. Under freezing winter conditions, the output can be miniscule because very cold weather and high winds require turbines to be shut down to avoid damage. As in Germany, unreliability in meeting power demands has necessitated importing nuclear power from France. Also similar to Germany, the U.K. government is closing some of its older coal-fired plants -– any one of which can produce nearly twice more electricity than all of Britain’s 3,000 wind turbines combined.
If the European romance with increasing reliance upon renewables isn’t being strained enough by painful electricity costs, power blackouts are adding to buyer’s remorse. As millions of consumers turn lights and appliances on and off, power generators and grid operators must match supply to demand to ensure that current is moving across wires at proper frequency to avoid power failures, brownouts and other glitches.
This is much less of a problem when there are reliable backup sources such as hydropower, coal, and nuclear plants to meet base-load demands. Unfortunately, Most of Europe lacks the former, and is intentionally cutting back both of the latter. As the balance of supply shifts increasingly to intermittent wind and solar, so does the demand-response inequity problem.
The German energy industry group BDEW warns that the surge of renewables is increasingly clogging the power grid and eating into profits of large power stations.
Daniel Dobbeni, president of the E.U.’s Network of Transmission System Operators, addressed this issue in an April 17, 2012, letter to the European Union Commissioner Gunter Oettinger. He said that grid operators are “deeply concerned about differences in speed between the connection of very large capacities of renewable energy resources and the realization in due time of the grid investment needed to support the massive increase of power flows these new resources bring.”
Politicians are getting the message. Plans for a cap on electricity prices, proposed by pro-business German Economics Minister Phillip Rosler and Environment Minister Peter Altmaier, have made wind investors jittery. This could reduce existing guaranteed feed-in tariffs that wind operators require to prevent consumer costs from skyrocketing even more than they have already.
Speaking at a June 12 energy conference in Berlin, Chancellor Merkel had even called for reduced scaling back renewable energy subsidies to contain spiraling costs which have now reached around $27 billion per year. The chancellor noted that, “If the renewables surcharge keeps rising like it did in recent years, we will have a problem in terms of energy supply.”
Signs of constructive change are far more apparent in Australia. In September, the right-of-center Liberal Party, headed by incoming Prime Minister Tony Abbott, resoundingly defeated the Green Party-backed Labor Party following its 6 years in power. The election was broadly recognized as a public referendum victory to dismantle and consolidate the myriad anti-carbon, global warming-premised schemes spawned under the previous government. That bureaucratic apparatus currently consists of more than 30 programs under seven departments and eight agencies.
A carbon tax was widely blamed as a large contributing factor for record business failures and soaring costs, even for essentials. Chief Executive Mitch Hooke with the Minerals Council of Australia has said that it was costing the economy more than AUD$100 million per week. He also pointed out that a 30% tax imposed by the Labor Party upon mining profits has added an additional unsustainable burden, particularly upon the coal sector, resulting in project cuts and job losses.
Lessons for America
As American Energy Alliance spokesman Benjamin Cole notes: “The results of the [Australian] election should be an instructive lesson for U.S. lawmakers who have yet to understand the economic consequences of a carbon tax.” He warns that, “Given the results of Aussies’ election, U.S. policymakers who want to replicate the failed Australian experiment on the U.S. economy will do so at their own peril.”
Thanks to natural gas, coal, and nuclear, America, unlike Europe, very fortunately has excess power generating capacity and generally adequate transmission and distribution systems. However, as our older nuclear plants are decommissioned and new Environmental Protection Administration regulations shutter coal-fired plants, states such as California that are increasing renewable requirements are likely to resemble Europe in more ways than even they wish to emulate.
According to 2012 EIA figures, slightly more than 42% of U.S. electrical power came from coal, 25 % from natural gas, 19 % from nuclear, about 3.4% from wind, and about 0.11% from solar. Since 2009 American taxpayers have shelled out $14 billion in cash payments to solar, wind, and other renewable energy project developers. This includes $9.2 billion to 748 small and large wind projects and $2.7 billion to more than 44,000 solar projects, which will add just 48 terawatt- hours of electricity.
Just as in Europe, without all that help, U.S. wind and solar wouldn’t have survived, and very likely won’t in the future. In December 2010, as reported in the Wall Street Journal, American Wind Energy Association CEO Dennis Bode warned that without the extension of the Federal 1603 grant program investment credit, the wind industry would “flat line” or slope downward.
Those investments haven’t been trivial. Just since January 1, 2013, the Obama Administration’s Department of Energy has awarded more than $1.2 billion in charity to 435 new renewable energy projects, including 381 solar awards. In addition, DOE is pressing ahead with plans to throw in $150 million more for renewable projects — money “left over” from a separate 48C tax credit stimulus program.
In June President Obama launched a sweeping new national campaign including tens of billions of dollars more in new subsidies for solar, wind, and bio-energy projects. Yet according to results of a 2-year-long a National Research Council study, those types of subsidies are virtually useless in quelling greenhouse gasses. They have done little or nothing so far, and are unlikely to do much more before 2035, the study’s research horizon.
If there is one central lesson to be gained from the European debacles, it is that wind, solar, and other so-called “alternatives” aren’t alternatives at all in any credible sense. This doesn’t rule out special places and cases where they may eventually have legitimate, if limited, niches in the national energy mix. But regardless how much money is spent to harness friendly breezes and sunbeams, the climate will continue to go on changing according to Mother Nature’s edicts, just as it always has over many millions of years before we showed up on the scene.
A version of this article was first posted in Forbes online under the title, “Will cooling temperature and economic climates finally take the wind out of failed energy policies?”