Editor’s Note: Right now, the global elite and world leaders are coming together at the UN Climate Change conference in Glasgow to address the “problem” of climate change.
Over the next couple of days, Washington DC insider David Stockman will debunk the narrative and offer a comprehensive look at the climate change agenda, including what it means for you.
Below is part four of David’s article series.
The chart below dramatically underscores why the CO2 witch-hunt is such a deadly threat to future prosperity and human welfare. To wit, even after decades of green energy promotion and huge subsidies from the state, renewables accounted for only 5% of primary global energy consumption in 2019 because:
- They are still very un-competitve (high cost) relative to the installed base of fossil, nuclear and hydroelectric energy; and,
- They do not really even account for the 5% share reflected in the chart in terms of ability to delivery work to the economy owing to intermittency of wind and solar power and the fact that by convention government scorekeepers gross-up renewables-based electrical power delivered to end-users to account for transmission and distribution (T&D) losses in the electric power grid.
By contrast, the 84% share attributed to oil, natural gas and coal is actually far larger in practical terms as we look into the future. That’s because most of the prime hydro sources have been tapped out long ago and are therefore not a meaningful source of growth. During the last 10 years, for example, US hydro-power output has only increased from 275 billion KWh to 288 billion KWh or by barely 0.24% per annum.
Likewise, nuclear power capacity outside of China stopped growing decades ago due to massive political and regulatory resistance. Germany, for example, is in the process of closing its last nuclear plants from a fleet that once generated 170,000 GW hours annually (2000) and is now generating only 75,000 GW hours, with a zero target by the year 2030. Even in the US, nuclear power remains dead in the water, with annual output rising from 754 billion KWh in 2000 to just 809 billion KWh in 2019.
Beyond that, the Climate Howlers are not talking about a gradual substitution of solar and wind for the three fossil based sources of primary energy as existing plants reach the end of their useful lives over the next 50 years. To the contrary, zero net CO2 emissions targets for 2050 will require the massive early retirement and dismantlement of perfectly good power plants and tens of millions of internal combustion (IC) engine vehicles.
The prospect of substituting green power for existing fossil fuel capacity over the next several decades is where the rubber meets the road. But to grasp the full extent of the impending calamity it is necessary to recall that Keynesian GDP accounting inherently obfuscates the true economic cost in a drastically downward direction.
In a word, unlike business accounting, Keynesian GDP accounting is based purely on spending—with no regard for balance sheet changes such as the accounting charge for dismantling a perfectly efficient and serviceable coal-fired power plant. In that case, the utility owner would take a charge for the value of the wasted asset, but such charge—which represents a loss of corporate net worth and hence societal wealth—-would never show up in the GDP accounts.
In fact, Keynesian GDP accounting is just the modern iteration of Frederic Bastiat’s famous “broken window fallacy”. Gross capital spending gets added to the total of GDP with no offset for depreciation and asset write-offs. That’s why, we suppose, climate change activists get all giddy about the alleged economic growth benefits and job gains from green investment: They just don’t count all the assets wasted and jobs lost by shutting down efficient coal mines or fossil-fired utility plants.
Nor are we talking about small amounts. To come even close to the utterly ridiculous COP26 target of net zero emissions by 2050 literally tens of trillions worth of fossil-fired power plants, heating units, chemical processing plants and internal combustion engine vehicles would have to be decommissioned and taken out of service long before their ordinary useful economic lives had been reached.
For instance, notwithstanding Washington’s endless gumming about green energy and tens of billions of subsidies annually, including gifts of more than $2 billion per year to the wealthy buyers of Elon Musk’s Tesla EVs, fossil fuel consumption in the electric power utility sector—the only sector were green energy has even made a dent—-has hardly declined at all.
What happened, instead, is that between 2000 and 2019, US coal and oil-fired generation dropped from 2,090 billion KWhs to 1,004 billion KWhs or by 52%, but that was nearly off-set by a huge jump in natural gas-fired generation. Specifically, natural gas fired output of 601 billion KWhs in 2000 rose to 1,586 billion KWhs by 2019, a gain of 164%.
Accordingly, the needle on overall fossil-based generation hardly moved, dropping from 2,691 billion KWhs in 2000 to 2,590 billion KWhs in 2019. So the question recurs, how in the world do these lame-brains expect to get to zero CO2 emissions from the utility sector when over the last 19-years, the rate of fossil-fired production has declined by a trivial –0.20% per annum.
Moreover, as we suggested above regarding the global balances, there is no reason whatsoever to expect any material displacement of fossil-based power production by nuclear or hydro. Combined these two sectors produced 1,097 billion KWhs in 2019, but if anything production is likely to fall in the next several decades.
In the case of last year’s 288 billion KWhs of hydro generation, all the rivers in the US that can be harnessed have been—or at least any that the environmentalists would allow to be damned-up. But the large non-fossil piece represented by nuclear power is where big time trouble is brewing.
The fact is, the last nuclear reactor commissioned in the US was in 2016 for Tennessee Watts Bar Unit 2, which was a companion to the second most recent addition, Watts Bar Unit 1, commissioned way back in 1996.
That’s right. In the last quarter quarter century there has been a grand total of two nuke plants commissioned. This means quite evidently that the nation’s grand total of 94 operating commercial nuclear reactors at 56 nuclear power plants in 28 states are old as the hills— averaging 25-40 years old and heading for decommissioning in the normal course.
The implication cannot be gainsaid. Unless there is a total political reversal with respect to nuclear power, the 809 billion KWHs generated in 2019, which represented nearly 20% of total utility output, will likely be shrinking from normal retirements faster than new plants can be licensed, built and made operational, a process which typically takes well more than a decade.
Of course, there is also a smattering of biomass and geothermal production, but that hasn’t been going anywhere, either. Total generation amounted to 72 billion KWHs in 2019, a small decline from the 75 billion KWhs in the year 2000.
Finally, there is the matter of growth. Even at the tepid level of GDP growth during the last decade, and despite continued improvements in the efficiency of electrical power use in the US economy, total power output rose from 3,951 billion KWHs in 2009 to 4,127 billion KWhs in 2019, representing a modest 0.44% per annum growth rate.
Then again, a continuation of that modest growth trend—which would be the minimal gain compatible with a continued slow rise in real GDP—would result in total power output requirements of 4,427 billion KWhs by 2035 or 300 billion KWHs more than current levels.
So here’s the skunk in the woodpile. Total solar and wind-fueled power output in 2019 was just 367 billion KWhs or 8.9% of total utility output. That is, it will require the equivalent of fully 82% of current so-called green power production just to supply projected system growth. And that’s to say nothing of replacing nuclear production that is likely to be falling due to retirements and obsolescence or, more importantly, displacing some of the 2,590 billion KWhs of fossil production still in the nation’s electrical power grid.
Let us re-iterate: Unless a large share of that 2,590 billion KWhs of capacity is shuttered, the idea of zero net CO2 emissions is a pipe dream.
At the same time, it would take trillions of taxpayer subsidies to lift the current 367 billion KWhs of green power production toward even half of power requirements by 2035, which would exceed 2,200 KWhs. And that simply isn’t going to happen in a month of Sundays.
Moreover, that’s not even the half of it. Green power production, and especially wind which accounted for 4X more output than solar in 2019, ( 295 billion KWhs versus 72 billion KWhs) is highly intermittent based on seasonal patterns and daily wind strength. Nationally, wind plant performance tends to be highest during the spring and lowest during the mid-to late summer, while performance during the winter (November through February) is around the annual median. However, this pattern can vary considerably across regions, mostly based on local atmospheric and geographic conditions.
As a result, a wind plant’s capacity factor—a measure of the plant’s actual power generation as a percentage of its maximum capacity—is very closely related to the available wind resource, or average wind speed. For example, in New England, the median January capacity factor is about 32%, well above the annual median, while the July capacity factor is closer to 14%, far below the annual median.
In a word, to get the same output and reliability as gas or coal-fired base-load plants, green power plants need to be drastically oversized both in terms of maximum output capacity and back-up storage units. As shown below, for most regions of the country, median monthly wind capacity factors range between just 25% and 35%.
Needless to say, low capacity factors mean high all-in costs for electrical energy delivered to the grid. Analysts use a concept to capture this called LCOE (levelized cost of energy), which is the present value of total cost over the lifetime of a plant divided by the cumulative amount of electricity generated over the lifetime.
Using this comprehensive measure, in turn, permits an estimate of the “imposed cost” on the grid owing to the low load factors and unreliability of wind and solar power. Thus, compared to an LCOE of $36 per megawatt hour of capacity for a combined cycle gas-fired plant, the imposed cost alone is $24 per megawatt hour for wind and $21 per megawatt hour for solar. And on top of that comes far higher CapEx costs for the actual wind and solar installations.
Accordingly, the cost of funding power output growth plus displacement of substantial amounts of fossil fired production would be staggering. Recent detailed study by the Institute for Energy Research show the LCOE calculations for the range of fuels sources:
LCOE Per Megawatt Hour Of Capacity:
- Combined cycle natural gas: $36;
- Nuclear: $33;
- Hydro: $38;
- Coal: $41;
- Onshore wind: $85;
- Solar PV: $89;
- Offshore Wind: $132.
These differentials between conventional and green sources of power generation are clearly staggering and contradict the constant propaganda from the Climate Howlers, who falsely claim that solar and wind are cheaper than existing power sources.
But as we will amplify in the final installment (Part 5), the actual scenario is far more forbidding than even these all-in cost differentials would suggest. That’s because the second part of the green agenda is to convert the nation’s efficient fleet of 285 million IC engine vehicles to electric battery power and 70 million natural gas and oil heated homes to green electricity, among others.
What that will do, of course, is make peak power demand swings on the grid far more extreme—even violent—just as the reliability of a green-powered utility sector falls sharply.
GreenMageddon is exactly where we are heading.
Editor’s Note: We’ve seen governments institute the strictest controls on people and businesses in history. It’s been a swift elimination of individual freedoms.
But this is just the beginning…
Most people don’t realize the terrible things that could come next, including negative interest rates, the abolition of cash, and much more.
If you want to know how to survive what the central bankers and the Deep State have planned, then you need to see this newly released report from legendary investor Doug Casey and his team.
Tags: economic collapse,