There is now more than enough evidence to show that renewables do not work.
At a February 2000 press conference, the first man to walk on the moon announced the National Academy of Engineering’s twenty most significant engineering achievements of the twentieth century. The aeroplane took third place; the automobile second; in first, the vast networks of electricity that power the developed world. None of the other nineteen would have been possible without electricity, Neil Armstrong declared. “If anything shines as an example of how engineering changed the world during the twentieth century,” he said, “it is certainly the power we use in our homes and businesses.”
The twentieth century’s bequest of cheap, reliable electrical energy is now being undone. For the past decade or so, Australia and other industrialised countries have been conducting a vast experiment on their electrical grids. Tried, tested and refined technologies — predominantly based on coal-fired generation — are being replaced by weather-dependent wind and solar farms. Western societies are moving from industrial means of generating their electricity, with the precision, reliability and economies of scale that implies, to intermittent sources that, like agriculture, depend on the weather, with all that implies for cost and reliability.
The green energy revolution – counter-revolution would be more accurate – did not come about because wind and solar are superior generating technologies. If they were, they wouldn’t have needed the plethora of costly political interventions. These have turned the electricity market into an Aladdin’s cave for rent-seekers while destroying the market’s function to allocate capital sensibly and serve customers efficiently. Instead, the origins of the renewable experiment lie in a deeply ideological reaction against the Industrial Revolution, which, in one of the most important developments of our age, almost imperceptibly became the boilerplate of elite opinion.
Now the results of that experiment are in and they’re not looking good. Australians formerly enjoyed one of the world’s lowest-cost energy markets. Not anymore. In nine years, retail prices in the National Electricity Market (NEM) are up 80-90%. In just two years, business electricity costs doubled, even tripled, resulting in staff lay-offs, relocations and industry closures. ‘The requirement is for efficient prices and affordability for “a healthy NEM,” the Energy Security Board states in its first annual report.
What are Australians getting for these cost increases? Last year saw an unprecedented increase in the number of tight supply/demand notices. The constraints now required for system security are estimated to be costing ‘tens of millions of dollars,’ according to the Energy Security Board. Even this is likely to be a serious underestimate. Comparing average electricity prices with those during January’s two-day heat wave – a by no means abnormal occurrence – suggests total extra electricity cost of $400m in Victoria and South Australia.
Regulatory economist Alan Moran has graphed the cost of the renewables counter-revolution. It shows that after inflation, retail electricity prices steadily falling for 25 years from 1955 to 1980. Then, with some bumps up and down, prices flat-lined until around 2005, when the rapid growth of wind and solar sees the near doubling of electricity prices in a little over a decade, more than reversing the post-1955 decline.
You don’t have to be a Thomas Edison or a Nikola Tesla to see that putting large amounts of intermittent capacity into the grid while keeping the lights on will result in higher costs. Wind and solar suffer the obvious shortcoming that they respond to the weather and not to customer demand, something that should have killed off the experiment right at the start.
It gets worse. The Energy Security Board points out that the ability of the grid to cope with sudden supply/demand imbalances is determined by the inertia in the power system, which in the twentieth century was provided by big, heavy turbines spinning at near constant speeds. Before they were taken off the grid, coal fired power stations provided grid stability at no extra cost. Coal turbines are 600 tons and spin at 3,000 rpm. Wind and solar photovoltaics (PV) are non-synchronous and have low or zero physical inertia. As South Australians are finding out, taking coal offline while putting more wind and solar online makes for a fragile grid.
There is now more than enough evidence to show that renewables do not work. We’re at the stage of the revolution where rationalisations for failure have to be found to explain why it’s not working as advertised. It’s a familiar pattern. Apologists for the Communist experiments of the last century used to argue that the idea was noble; the problem was the way the revolution was implemented. Similarly, evidence that the renewable energy experiment isn’t working indicates, we’re told, that the experiment hasn’t been implemented properly. A tweak here, a stronger policy commitment there, and somehow it will all come right — the revolution able to proceed as even more wind and solar is added to the grid.