Net Zero Watch | 27 Aug 2022
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UK faces ‘catastrophe’ after energy bills soar 80% amid warning price cap could hit £7,000  1) UK faces ‘catastrophe’ after energy bills soar 80% amid warning price cap could hit £7,000 The Independent, 27 August 2022 2) Green Britain: Social care faces collapse as soaring energy prices push up costs almost tenfold, experts warn iNews, 26 August 2022 3) Net Zero bankrupts Britain The Wall Street Journal, 27 August 2022 4) Middle earners need urgent help to survive energy crisis, Chancellor warns The Daily Telegraph, 27 August 2022 5) Green Britain: Electric cars will be more expensive to run than petrol The Daily Telegraph, 27 August 2022 6) Juliet Samuel: How governments and the cult of Net Zero wrecked the energy market The Daily Telegraph, 27 August 2022 7) Tories in disarray over energy crisis as Truss urged to spell out plans to help The Guardian, 26 August 2022 8) Forget showering, it’s eat or heat for shocked Europeans hit by energy crisis Reuters, 26 August 2022 9) EU calls emergency meeting amid ‘energy war’ with Russia and soaring gas prices Forbes, 26 August 2022 10) Back to the dark ages: Germans are looking to firewood for energy as natural gas prices soar Quartz, 26 August 202211) James Freeman: Why the energy transition will fail The Wall Street Journal, 27 August 2022  1) UK faces ‘catastrophe’ after energy bills soar 80% amid warning price cap could hit £7,000 The Independent, 27 August 2022 The government has been warned that lives will be put at risk unless it takes urgent action The scale of the squeeze Britons face on their incomes has been laid bare, with the energy price cap confirmed to increase average bills by more than 80 per cent in October – and forecasts predicting annual costs of £7,000 by April. Regulator Ofgem has revealed that the price cap, which is supposed to protect consumers from unfair energy bill increases, will rise to £3,549 per year for an average household – more than three times last winter’s level. That is expected to leave some 8.9 million households in fuel poverty, charity bosses have said, with a “real risk” that children will go hungry as Britain’s poorest see almost half of their income taken up by gas and electricity. The government has been warned that lives will be put at risk unless it takes urgent action to shield families from massive price hikes, with ministers having so far failed to answer calls for more financial help. However, Boris Johnson finally acknowledged on Friday that his successor as prime minister would “plainly” have to offer more cash, while the chancellor, Nadhim Zahawi, told people to cut down on their energy consumption to reduce their bills and insisted he was working “flat out” to develop support measures. Alarmingly, worse is yet to come, after frenzied trading in wholesale energy markets on Friday saw gas prices jump by another 10 per cent, adding to big gains in the past two weeks. At current market prices, the cap would exceed £5,500 a year by January and £7,000 by April, as analysts warned that the cost of gas could go higher still as Russia further squeezes vital supplies relied on by European countries. That would deepen the problems faced by millions of low-income families, who will already struggle to afford adequate heating and power through the colder months. Even at the October cap level, poorer households will see their incomes “wiped out”, the Joseph Rowntree Foundation (JRF) said. The charity calculated that an average low-income family will have to pay four and a half times more for energy in 2023/24 compared with last year, while single parents will hand over almost two-thirds of their income after housing costs. Energy bills for low-income adults will exceed 120 per cent of their income. “This is a truly impossible situation, leaving them having to cut down on energy use even to pay their bill, and having no money whatsoever left over for food or other essentials,” the JRF said. Middle-income families will see almost a fifth of their earnings go on gas and electricity, prompting fears that businesses will collapse as people tighten their belts and spend less on non-essential items. The National Institute of Economic and Social Research (NIESR) said its calculations showed that around 2.2 million additional households will run out of savings by April 2024, bringing the total to around 6 million. Full story 2) Green Britain: Social care faces collapse as soaring energy prices push up costs almost tenfold, experts warn iNews, 26 August 2022  The entire social care sector faces collapse in the wake of soaring energy bills with the cost of running care homes rising tenfold, experts warned. The chief executive of Care England said providers faced a staggering 683 per cent increase in energy costs during the past 12 months, with bills expected to rise again early next year. For gas and electricity, the costs were £660 per bed, per year, this time last year; this week, care providers have to pay an astonishing £5,166. Professor Martin Green said soaring energy prices represented an additional cost of more than £2bn per year across the social care sector, putting the industry at “very severe risk”. The figure is based on the October 2022 market rates, and with 454,933 Care Quality Commission registered beds. Care homes are particularly at risk as they are not subject to the price cap, which is for consumers, and will not be in a position to reduce energy use over winter. On Friday, Ofgem announced the energy price cap for consumers will rise to £3,549 a year – a rise of 80 per cent. Latest estimates suggest it will reach £6,616 in April. With company tariffs uncapped, some businesses are already facing a price increase of more than 350 per cent. Professor Green said: “The energy crisis comes at a time when adult social care is already facing the most challenging circumstances in its history. Current packages of Government support ignore the social care sector entirely. Care providers, despite paying the same VAT and Green Levy rates on energy bills as domestic settings, are not subject to the domestic price cap and are not set to benefit from the £400 energy rebate. “While these measures are incredibly important to protect public health and support struggling households across the country, parity must be introduced in the treatment of the most vulnerable in our communities. Without immediate and targeted support from Government, this energy crisis poses a very severe risk to the sustainability of care services across the country.” With research from the Centre for Health and the Public Interest (CHPI) estimating the sector’s total pre-pandemic profits before tax, rent payments, directors’ remuneration and repayments on loans at £1.5bn per year, and the rise in energy prices will eradicate profit margins generated across the sector, driving many providers into insolvency and eliminating scope for investment. Full story 3) Net Zero bankrupts Britain The Wall Street Journal, 27 August 2022  By The Editorial Board Americans who fancy themselves net-zero climate advocates might want to take a look at Britain for a guide to the future. Household energy bills were expected to rise 40% this autumn, but on Friday the government regulator announced they’ll leap 80% in a single bound. This boost follows a 54% rise in April and brings the average household’s annual bill to £3,549 ($4,208). The median household income is £31,400, which gives a sense of the growing proportion of each household’s budget that will go toward central heating, cooking and keeping the lights on. For the ruling Tories, this is a political calamity. And that’s merely what households will spend directly on energy. Britain is also in the grip of an energy-price crisis for businesses, whose rates aren’t subject to a cap. Some small businesses report they can’t get any utility to supply them without paying a steep deposit up front, because energy companies are concerned that high prices will push more small firms into insolvency. Lower-income households in particular will bear the brunt of this as prices for goods and services skyrocket and companies lay off employees. If you think this couldn’t happen in America, think again. The underlying cause of Britain’s energy misery is its fixation with climate goals, especially the ambition to achieve net-zero CO2 emissions by 2050. To meet that goal Britain has grown hostile to domestic energy exploration, banning shale-gas fracking and slapping windfall-profits taxes on North Sea oil and gas producers that will deter investment. Russia’s invasion of Ukraine has hurt, but the U.K.’s policies made its citizens vulnerable to such a global shock. The U.K. is belatedly building new nuclear plants, but those will take years to come online. Unreliable wind and solar raise the cost the electric grid must pay to balance supply and demand when the winds are still and the sun is behind clouds, and more than 80% of English households rely on gas rather than electricity to heat their homes. All of this drives up the cost of supplying power, and then the government adds about £153 in green levies and a 5% consumption tax directly on household bills. This isn’t all that different from the energy policies the Biden Administration and Democrats in Congress, California and New York are imposing via the Inflation Reduction Act and myriad regulatory assaults on fossil fuels and favors for renewables. Britain’s inane innovation is a price cap that causes disastrous price increases to happen twice a year rather than continuously. To adapt Hemingway, net zero drives you bankrupt gradually, then suddenly. Britain’s sudden energy agony is a five-alarm warning if the climate progressives continue to have their way. 4) Middle earners need urgent help to survive energy crisis, Chancellor warns The Daily Telegraph, 27 August 2022  Middle-earners on salaries of £45,000 will need help from the Government to pay their energy bills, the Chancellor warned on Friday. In an interview with the Telegraph 11 days before the new Prime Minister takes office, Nadhim Zahawi said that support cannot be confined to families on benefits and added that gas prices could remain punishingly high for two years. In a break with Cabinet colleagues, he also urged households to cut their energy use. It came as the energy regulator Ofgem increased the price cap on household bills by 80 per cent to £3,549 a year from October, in a blow to millions of households struggling with the cost of living crisis. There were also predictions that bills could further increase to £6,600 within months. The surge means that it will cost £3.60 an hour to run a boiler to heat a small house, while even boiling the kettle will cost 10p and some electric cars will be more expensive to drive than their petrol equivalents. Mr Zahawi has drawn up a menu of options for the next Prime Minister amid calls from Ofgem for urgent help. Options under consideration include freezing the price cap as suggested by Labour, increasing benefits, handing extra support to small businesses and a loan scheme for suppliers that could shave £500 off bills. Currently, every household is being given a £400 rebate on their energy bills to be paid in instalments starting in October. Those on Universal credit and other benefits have also been given grants of £650. The debate is now focused on whether extra support should be confined to the poorest families or spread more widely. Mr Zahawi said: “My concern is there are those who aren’t on benefits. “If you are a senior nurse or a senior teacher on £45,000 a year, you’re having your energy bills go up by 80 per cent and will probably rise even higher in the new year – it’s really hard. “If you’re a pensioner, it’s really hard. So Universal Credit is a really effective way of targeting, but I’m looking at what else we can do to make sure we help those who really need the help. We’re looking at all the options.” Analysts predicted the price cap could reach more than £6,600 by April – technically pushing households with an income of £66,000 or less into fuel poverty, where they spend 10 per cent or more of their earnings on bills. It came as the Chancellor became the first Cabinet minister to suggest people cut their bills by using less energy, telling broadcasters: “The reality is that we should all look at our energy consumption.” Mr Zahawi told the Telegraph he had also drawn up a series of options to help small firms, who are not covered by the cap. One idea is reintroducing Covid-era cuts to VAT and business rates to help the hospitality and leisure industries, which are particularly hard hit by energy price rises. He said he was considering handing energy suppliers huge loans to enable them to weather the crisis and reduce bills by up to £500 a year. And he refused to rule out a freeze in the energy cap similar to the one demanded by Labour, saying “nothing is off the table”. “We are in a national economic emergency,” Mr Zahawi said. “This could go on for 18 months, two years, if Putin continues to use energy as a weapon.” Full story 5) Green Britain: Electric cars will be more expensive to run than petrol The Daily Telegraph, 27 August 2022 Electric vehicles will be more expensive to run than petrol equivalents from October as the latest price cap hike punishes drivers for going green.  The unit cost of electricity will nearly double under new energy prices released yesterday, taking it to 86p per kWh, up from 56p. Petrol prices have fallen in recent weeks and stand at £1.70 per litre, in comparison. As a result, it will cost more to travel long distances in an electric car than a petrol one – even before factoring in higher purchase prices for greener vehicles. The owner of a Jaguars i-PACE, an electric SUV, would spend £99 more to travel the same distance as a driver in the petrol equivalent, the Jaguar f-PACE, according to calculations by breakdown service, the RAC. The petrol version can travel around 400 miles on a full tank of petrol, which would cost around £50. The electric model only has a range of 290 miles and would need multiple charges to travel 400 miles – this would cost £99 more after October’s electricity price hike. The same is true for cheaper models. A Kia e-Niro owner would have to spend £88 more than a Kia Sportage driver to travel the same distance. The e-Niro will cost £33.80 to fully charge from October compared to £18.37 at the moment, RAC estimations showed. The firm’s Rod Dennis said those who charged their cars at home would really feel the impact of October’s energy price rise. He added: “A full charge of a typical family-sized electric SUV will cost 84pc more from October than it does under the current cap. Public charge points also have no choice but to increase prices to reflect rising wholesale costs, which will heavily impact drivers.” Electric vehicle drivers can secure preferential electricity rates to charge at home with special EV tariffs available from some energy firms. However, the upfront cost of electric models is still far higher than petrol equivalents. Full story 6) Juliet Samuel: How governments and the cult of Net Zero wrecked the energy market The Daily Telegraph, 27 August 2022  Putin may be the proximate cause of this crisis, but the reason we were vulnerable was an intentional policy to crush fossil fuel investment Ten years ago, I flew to Texas to take a tour of the US’s most productive gas field. The Anglo-Australian mining giant, BHP Billiton, had spent $20 billion buying a slice of the Eagle Ford shale field and was trying to convince investors, via the media, that it had been a good idea. BHP’s oil chief, Mike Yeager, a genteel, walrus-moustached Texan, hosted us on a flight over the woods and meadows of Eagle Ford in a helicopter, took us to see production wells, and introduced us to officials in a county (population 20,000) generating $71 million in gas tax revenues. BHP would spend a further $20 billion developing the field before eventually selling it to BP for just $10 billion. It had bought at the top. This investment rollercoaster has been on my mind because it was the last time serious new money was put into oil and gas development. Since then, investment has fallen 60 per cent. With it, the stock of proven “reserves” – fossil fuels found and viable for extraction – has fallen more than 50 per cent. Now the reckoning has come. With Russia cutting supply, prices are rocketing. Since January last year, US gas prices have risen nearly threefold. European gas is up sevenfold. Bills are following suit. Proximately, this is because of Putin. But the reason we are so exposed to the whims of a murderous dictator is under-investment. Why has there been such dramatic under-investment and why is it that producers are hesitating, when they would normally respond to soaring prices by pushing up production and investment? Well, after the shale writedowns, governments and corporate governance busybodies didn’t just leave the losers to lick their wounds. They mounted a campaign to shut down investment permanently in the lifeblood of the global economy – energy – in the name of saving the planet. What we are now facing are the consequences of these decisions. The mistakes span governments, continents and decades. They are going to cause untold hardship for millions. They threaten not just our economy and health, but the durability of the Western alliance. Most ludicrously, they risk making semi-permanent the role of coal as an emergency back-up when it’s the dirtiest fuel of them all. The original error was not with the science of climate change. It was not with the notion that we should phase out coal. But sometime around 2014-16, regulators, lawyers and politicians began to run with the idea that the trashing of “big oil” (and so on) led by students in feathered war bonnets was costless, popular and green. What followed was a co-ordinated effort to run down fossil fuel production, seemingly without a thought for the vastly different environmental impacts of gas versus coal or the need for Western economies and people to enjoy a reliable supply of energy. In 2015, the then Bank of England governor Mark Carney (yes, him again) gave a speech talking up the risk of climate “stranded assets” – energy investments that would be rendered worthless by climate change legislation. The EU excluded gas and nuclear from its list of “green” technologies eligible for “sustainable” grants, investment and the like. The UN issued ethical investment guidelines that discouraged putting new money into fossil fuels. Theresa May rammed net zero through Parliament without scrutiny of the cost and slapped the “price cap” on utility firms, which soon after began to go bust by the dozen. Last year, Rishi Sunak added “supporting the net zero transition” to the Bank’s mandate. And the more production we shut down, the more virtuous we felt. It wasn’t just in Europe. US officials also took up the mantle. States passed net zero laws that, like ours, had no accompanying energy production strategy. Bureaucrats from California to New York began to pressure insurers and oil firms to account for fossil fuel investments or answer in the courts for “climate fraud”. The Keystone XL oil pipeline was blocked. Investors, taken over by righteous and economically illiterate “environmental, social and governance experts”, pressured oil firms to stop investing and banks to stop funding them, and then went on a marketing binge to sell expensive “ethical” investment products. Industry saw the writing on the wall. Utilities shut down their long-term gas contracting departments and began to buy gas at the going price on the day, fatally undermining security of supply and making new investment un-financeable. Fossil fuel producers began handing money back to investors. Even state-owned producers, like Qatar, cut investment on the basis that Europe (the UK included) had become an unreliable customer. In the first half of this year, even as Russia began to turn the screws, the West’s seven biggest oil firms spent more on dividends and share buybacks than on capital investment. They were only doing as they were told. And now? Well, now, as “big oil” might say: “We just walked in to find you here with that sad look upon your face.” Europe needs gas. It is pleading for gas. Instead of flying media to gas fields to court capital, the oil and gas men are being flown to the capitals of Europe and begged to invest. Despite the incredible prices, they hesitate. The meeting goes like this: “We need you!” say the politicians. The producers scratch their heads as they mull $20 billion, 20-year investments, and wonder whether, when the war is over and the green bandwagon rolls back into town, the politicians will still sound so sweet on them. “Your green targets still say we need to shut down by 2030,” they point out. To which Europe says: “Well, of course. Fossil fuels are evil!” The upshot is that the market is broken and it is governments and do-gooders who broke it. They broke it wantonly, recklessly, touting their saintly intentions, and now we are all reaping the consequences. The only way to resurrect it is with more government intervention. One scheme sketched out by Lambert Energy Advisory would see the EU and UK collectively co-ordinate utility companies to offer 15-year contracts for enough gas to replace Russian supply, using a dynamic pricing mechanism (that is, we obviously do not lock in 2022 prices for 15 years). The producers who fill the contracts can come from anywhere except hostile states. Do it right and just watch the investment taps – and then the gas taps – turn on at full flow again. And given the lower emissions of gas versus coal, the planet doesn’t even have to suffer. The alternative is that we continue with a policy of self-sabotage on a truly industrial scale. Politicians can blather about windfall taxes and price freezes all they want. If they don’t repair the market, it is irrelevant. In the meantime, the demolition ball of a self-created gas crisis is swinging through Europe. Will any of our leaders act to stop it? 7) Tories in disarray over energy crisis as Truss urged to spell out plans to help The Guardian, 26 August 2022  The Conservatives were in disarray over their response to the energy crisis on Friday, with some Tory MPs backing Liz Truss showing signs of jitters over her refusal to spell out how she would help households. The frontrunner to be prime minister in just over a week’s time said she would “ensure people get the support needed to get through these tough times” but had no new suggestions about how much or who would get assistance, with the average energy bill set to hit £3,549 from October. One Conservative MP supporting Truss said they “wanted to see more” and hoped the Ofgem announcement would “sharpen thinking” in her camp, while expressing frustration that her campaign had not relentlessly focused on what to do about energy bills. Another Tory MP who switched to Truss from another candidate said they felt “disappointed with the lack of focus on what matters to people” and acknowledged they had mostly backed her because she looked likely to win. A third Truss supporter, Chris Skidmore, wrote an article saying the UK needed to be weaned off gas, despite his favoured candidate backing more North Sea gas and having called overnight for fracking to be exploited in the UK. “Anyone that suggests that our dependence on gas isn’t the problem, or that the solution is more gas, is gaslighting you,” he wrote for PoliticsHome. Full story 8) Forget showering, it’s eat or heat for shocked Europeans hit by energy crisis Reuters, 26 August 2022 LONDON, Aug 26 (Reuters) – No more ironing, limited oven use and showering at work – Europeans are trying to keep their energy use down but the bills keep climbing. As wholesale gas and electricity prices surge, millions of people in Europe are now spending a record amount of their income on energy, data show. In the east England town of Grimsby, Philip Keetley didn’t turn on his cooling fan at home as Britain sweltered under a record heat-wave this summer. A look at his bank account showed he couldn’t afford to. “The cost of living has increased and yet you’re still expected to live on the money provided for when there wasn’t a crisis … I either can have my heating on or eat,” Keetley said. Citizens in other European countries too are voluntarily taking action to cut consumption as gas, electricity and fuel prices sky-rocket due to war in Ukraine, sanctions on Russia and the aftermath of the coronavirus pandemic. The benchmark European gas price has soared 550% in the past 12 months. The cost of energy for British consumers will rise by 80% from October, regulator Ofgem said on Friday, taking average annual household bills to 3,549 pounds ($4,188). read more European governments have rushed to offer aid, but data shows the assistance hasn’t made a significant difference to households. This winter, Britons will spend an average 10% of their household income on gas, electricity and other heating fuels as well as domestic vehicle fuels, mainly petrol and diesel, twice the amount in 2021, according to Carbon Brief’s calculations of official data. This makes the current energy crisis more severe than those of the 1970s and 1980s. An oil producer’s oil embargo and the Iranian revolution in 1979 caused blackouts and long queues in petrol stations in the West. At the peak of that crisis in 1982, people in the UK paid 9.3% of their income on energy. UK charity National Energy Action (NEA) estimates 8.9 million UK households could be in fuel poverty after October when Britain’s cap increases, up from 4.5 million last October. A household is defined as living in fuel poverty if it is low income and needs to spend 10% or more of its income on energy, according to NEA and other British charities. The definition is unofficially used in other European countries. “The increase in energy bills that we’re seeing is completely unprecedented,” said Peter Smith, director of policy and advocacy at NEA. “We think that those historical trends of low income households disproportionately spending more of their income on energy is still very evident.” EAT OR HEAT Keetley lost his job as a council adviser in April and lives on 600 pounds ($706.44) a month from a social security scheme. Half of that goes on rent, he said, with the remainder barely covering essentials. He now eats one meal a day and despite reducing energy consumption to a minimum, he spends more than 15% of his income on energy bills. A third of UK households have reduced cooker and oven use, a study by the Financial Fairness Trust showed, a third have reduced the number of showers they take, and half have turned down the temperature in their homes. “People are doing a lot to try to keep their bills down but they are going up anyway. That’s why we want to see more action from government,” said Jamie Evans, senior research associate at Bristol University who was involved in the Financial Fairness Trust’s study. Dawn White, who has renal failure, says she fears Britain’s spiralling energy costs mean she will no longer be able to afford her life-saving treatment. “Without my (dialysis) machine five times a week, 20 hours, I will die,” 59-year-old White, who lives in southeast England, told Reuters. read more Full post 9) EU calls emergency meeting amid ‘energy war’ with Russia and soaring gas prices Forbes, 26 August 2022 Officials from the Czech Republic called for an urgent meeting with European Union member countries to plan emergency measures to combat an “energy war” with Russia, as gas prices continue to skyrocket throughout Europe as Russia’s invasion of Ukraine continues. Czech Prime Minister Petr Fiala announced the “expedited meeting” will convene the EU’s Council of Ministers for Energy in a tweet on Friday, expressing a goal of finding “extraordinary measures to solve the energy situation.” The announcement comes amid warnings Germany’s biggest gas supplier, Uniper SE, could collapse if the country backs down from a levy on gas consumption aimed at providing financial assistance for suppliers. It also comes hours after a report from the United Kingdom’s energy regulator Ofgem found energy prices in the United Kingdom are set to rise as much as 80% this fall (more than $4,000 per year) amid lingering inflation, which has already brought gas prices in Europe to record levels. European officials are concerned Russia’s war in Ukraine could prolong high energy prices throughout Europe, as Ukrainian officials warned on Thursday the eastern European country could be in for a long war of attrition. The EU’s announcement comes as Russian’s state-owned gas giant Gazprom has been burning off roughly 4.34 million cubic meters of gas per day, estimated to be worth $10 million—which experts are calling it an “environmental disaster”—that it would normally send to Europe instead. Rystad Energy estimates Europe’s gas imports from Russia are down 80%, CNN reported, following heavy economic sanctions from western Europe following the Kremlin’s invasion of Ukraine in February. Earlier this month, German officials announced plans to impose limits on heating in public buildings while German energy company RWE said it would burn excess coal as the supply of Russian gas dwindles. In May, the EU issued an embargo on Russian crude oil imports, which is set to take effect by the end of the year, although Rystad predicts the embargo will come in phases due to Europe’s overwhelming reliance on Russian oil and gas. In July, the EU announced another plan to limit gas consumption, following concerns that Russian President Vladimir Putin could shut down the Nord Stream 1 pipeline, the biggest pipeline to Europe. Fiala did not provide details on what the “extraordinary measures” would entail, although Czech Minister of Industry and Trade Jozef Sikela had mentioned price ceilings and diversifying prices based on energy productions, in an interview with reporters on Wednesday. 10) Back to the dark ages: Germans are looking to firewood for energy as natural gas prices soar Quartz, 26 August 2022  Skyrocketing prices for natural gas have Europeans scrambling for alternative energy sources. In Germany, where households face a 480 euro rise in their gas bills, people are resorting to stockpiling firewood. The fallout from Russia’s invasion of Ukraine has sunk Europe into the worst energy crisis in decades. From Italy to the UK, governments are racing to replace natural gas supplies from Russia and curtail the higher costs for industry and households. But consumers, too, are having to adapt, from cutting back on showering to firing up the chimney. The German word for firewood, “brennholz”, reached peak search volume on Google in mid-August: The rising cost of natural gas and firewood Almost 50% of homes in Germany are heated by natural gas, with another 25% using heating oil. In the past, less than 6% used firewood. That share is set to be higher this year. As natural gas prices soared, so have those for firewood and wood pellets: Heating furnaces and wood stoves are also selling out. Suppliers of the raw material are struggling to keep up, leading to scarcity of firewood. Earlier this summer, Germany’s Federal Firewood Association said the market was all out of wood. The lion’s share of firewood used in Germany—80% according to the association—is typically sourced domestically. Now German firewood suppliers are buying from Poland, leaving some residents in both countries to collect brushwood. To prevent panic-buying, one seller has been rationing purchases to three boxes of wood at a time. The process for drying out wood is long, compounding the ability to meet demand. Ideally, it takes six months to a year, because the more moisture wood contains, the less efficient it is at burning. Over the long run, the firewood rush also raises environmental concerns. Trees do not replenish quickly and are not a viable substitute for replacing oil and gas, according to scientists. The fumes from burning wood also contain toxic chemicals. Although Germany’s government deems burning wood for fuel as carbon-neutral, experts say the designation is not clear-cut. The combination of burning wood and cutting down forests may increase carbon emissions.11) James Freeman: Why the energy transition will fail The Wall Street Journal, 27 August 2022 New report highlights the staggering cost of green ‘delusions.’ Even if you’re never hit by a 7-ton blade falling from the night sky, alternative energy will fail you. Regardless of facts or feelings about the climate, there are reasons why wind and solar power are not replacing fossil fuels. Wind and solar are also no substitute for nuclear power. The government of California can issue as many proclamations and prohibitions as it wants against gasoline-powered vehicles. No doubt the Biden administration will enjoy spending the ocean of tax dollars now earmarked for low-intensity energy sources. But reality will stubbornly remain. In a new report due out next week from the Manhattan Institute, Mark Mills takes on the “dangerous delusion” of a global energy transition that eliminates the use of fossil fuels. Surveying energy markets and public policy around the world, Mr. Mills asks readers to “consider that years of hypertrophied rhetoric and trillions of dollars of spending and subsidies on a transition have not significantly changed the energy landscape.” He notes: “Civilization still depends on hydrocarbons for 84% of all energy, a mere two percentage points lower than two decades ago. Solar and wind technologies today supply barely 5% of global energy. Electric vehicles still offset less than 0.5% of world oil demand.” Mr. Mills then explains why the global appetite for energy is not heading south: “One can begin with a reality that cannot be blinked away: energy is needed for everything that is fabricated, grown, operated, or moved… digital devices and hardware—the most complex products ever produced at scale—require, on average, about 1,000 times more energy to fabricate, pound for pound, than the products that dominated the 20th century… it takes nearly as much energy to make one smartphone as it does one refrigerator, even though the latter weighs 1,000 times more. The world produces nearly 10 times more smartphones a year than refrigerators. Thus, the global fabrication of smartphones now uses 15% as much energy as does the entire automotive industry, even though a car weighs 10,000 times more than a smartphone. The global Cloud, society’s newest and biggest infrastructure, uses twice as much electricity as the entire nation of Japan. And then, of course, there are all the other common, vital needs for energy, from heating and cooling homes to producing food and delivering freight. Advocates of a carbon-free world underestimate not only how much energy the world already uses, but how much more energy the world will yet demand… In America, there are nearly as many vehicles as people, while in most of the world, fewer than 1 in 20 people have a car. More than 80% of the world population has yet to take a single flight.” He then proceeds to take on the argument that wind and solar power are now becoming competitive with fossil fuels: “Claims that wind, solar, and [electrical vehicles] have reached cost parity with traditional energy sources or modes of transportation are not based on evidence. Even before the latest period of rising energy prices, Germany and Britain—both further down the grid transition path than the U.S.— have seen average electricity rates rise 60%–110% over the past two decades. The same pattern is visible in Australia and Canada. It’s also apparent in U.S. states and regions where mandates have resulted in grids with a higher share of wind/solar energy. In general, overall U.S. residential electricity costs rose over the past 20 years. But those rates should have declined because of the collapse in the cost of natural gas and coal—the two energy sources that, together, supplied nearly 70% of electricity in that period. Instead, rates have been pushed higher thanks to elevated spending on the otherwise unneeded infrastructure required to transmit wind/solar-generated electricity, as well as the increased costs to keep lights on during “droughts” of wind and sun that come from also keeping conventional power plants available (like having an extra, fully fueled car parked and ready to go) in effect by spending on two grids. None of the above accounts for the costs hidden as taxpayer-funded subsidies that were intended to make alternative energy cheaper. Added up over the past two decades, the cumulative subsidies across the world for biofuels, wind, and solar approach about $5 trillion, all of that to supply roughly 5% of global energy. Whether it’s to cool a home, heat steel, or power a data center, the eternal engineering challenge has always been to find the lowest-cost way to make energy available when it’s needed to meet inherently variable demands, especially in the face of inevitable challenges from nature’s attacks as well as supply chain and machine failures. Oil, natural gas, coal, and even wood and water are easy to store in very large volumes at very low cost, but not so electricity. Hence, grid-scale electric availability has been made possible by using electricity-producing machines (turbines) that can be turned on when needed, fueled by large quantities of primary energy sources (such as natural gas, coal, and flowing water) that are easily and inexpensively stored. Such metrics characterize, for now, more than 80% of U.S. electricity production and more than 90% of transportation. The U.S., on average, has about one to two months’ worth of national demand in storage for each kind of hydrocarbon. Such enormous quantities are possible because it costs less than $1 a barrel per month to store oil or the energy equivalent of natural gas. Storing coal is even cheaper. Thus, over the past century, engineers achieved the feat of building a nation-spanning group of electricity grids that powers nearly everything, anytime, while still consuming less than 3% of the GDP.Storing electricity itself—the output from solar/wind machines—remains extremely expensive despite the vaunted battery revolution. Lithium batteries, a Nobel-winning invention, are some 400% better than lead-acid batteries in terms of energy stored per unit of weight (which is critical for vehicles). And the costs for lithium batteries have declined more than 10-fold in the past two decades. Even so, it costs at least $30 to store the energy equivalent of one barrel of oil using lithium batteries. That alone explains why, regardless of mandates and subsidies, batteries aren’t a solution at grid scales for days, never mind weeks, of storage.” President Joe Biden is unlikely to listen to such an explanation and who knows if he would even understand it. But reality’s not going anywhere. |
