Wednesday, 25 May 2022

42 Inconvenient Truths on the "New Energy Economy" [updated]

A lot of people 'know' a lot of bullshit stories when it comes to energy and the advent of what they call the "new energy economy." In this guest post, Mark Mills explodes 41 of the stupidest -- including several that you probably hold yourself, dear reader. Well, you and at least one other person...

"Hmmm, I didn't know that..."
Image Credit: Anders Hellberg [CC BY-SA 4.0 (]

41 Inconvenient Truths on the "New Energy Economy"

Guest post by Mark Mills

A week doesn’t pass without a mayor, activist, policymaker or pundit joining the rush to demand (or predict) an energy future that is entirely based on wind/solar and batteries, freed from the “burden” of the hydrocarbons that have fuelled societies for centuries. Only last week, the certifiable James Shaw, Minister for Climate Hysteria, told us we need to "supercharge decarbonisation and transform the energy system." 

Regardless of one’s opinion about whether, or why, an energy “transformation” is called for, the physics and economics of energy combined with scale realities make it clear that there is no possibility of anything resembling a radically “new energy economy” in the foreseeable future. Stopping the use of fossil fuels in the time talked about is simply fantasy. The alternatives are nowhere ready now, no more than they are likely to be when James Shaw thinks they will be.

It's not a matter of your opinion or mine, it's a matter of basic reality -- about the maths and physics of energy demand. For all the talk of solar or wind energy being "free," converting any energy source into useful power always requires capital-intensive hardware. And that hardware is neither cheap, nor omnipresent.

Bill Gates has said that when it comes to understanding energy realities “we need to bring maths to the problem.” So, in my recent Manhattan Institute report, The New Energy Economy: An Exercise in Magical Thinking, I did just that.

Herein, then, is a summary of some of the bottom-line realities from the underlying maths and physics. (See the full report for explanations, documentation, and citations.)

Realities About the Scale of Energy Demand

1. Hydrocarbons supply over 80 percent of world energy: If all that were in the form of oil, the barrels would line up from Sydney to Perth, and that entire line would grow every week by the height of the Sydney Harbour Bridge.

2. The small percentage-point decline in the hydrocarbon share of world energy use required over $2 trillion in cumulative global spending on 'alternative energy' -- popular visuals of fields festooned with windmills, and rooftops laden with solar cells, don’t change the fact that these two energy sources today provide less than 2% of the global energy supply.

3. When the world’s four billion poor people increase energy use to just one-third of Europe’s per capita level, global demand rises by an amount equal to twice America’s total consumption.

4. A 100x growth in the number of electric vehicles to 400 million on the roads by 2040 would displace just five percent of global oil demand.

5. To replace global hydrocarbons in two decades (which is what James Shaw et al appear to believe), renewable energy use would have to expand 90-fold. Yet it took half a century for global petroleum production to expand “only” ten-fold.

6. Replacing U.S. hydrocarbon-based electric generation over the next 30 years would require a construction programme building out the grid at a rate 14-fold greater than any time in history.

7. Eliminating the use of hydrocarbons to make U.S. electricity (impossible soon, infeasible for decades) would leave untouched the other 70 percent of reasons Americans use hydrocarbons —and Americans uses 16 percent of world energy.

8. Efficiency increases energy demand ... by making products & services cheaper: since 1990, global energy efficiency improved 33 percent, the economy grew 80 percent and global energy use is up 40 percent.

9. Efficiency increases energy demand  ... by making products & services cheaper: since 1995, aviation fuel use/passenger-mile is down 70 percent, yet air traffic rose more than 10-fold, and global aviation fuel use rose over 50 percent.

10. Efficiency increases energy demand .. by making products & services cheapersince 1995, energy used per byte is down about 10,000-fold, but global data traffic rose about a million-fold; global electricity used for computing soared.

11. Since 1995, total world energy use rose by 50 percent, an amount equal to adding two entire United States’ worth of demand.

12. For security and reliability, an average of two months of national demand for hydrocarbons are in storage at any time. Today, however, barely two hours of national electricity demand can be stored in all utility-scale batteries, plus all the batteries in America's one million electric cars.

13. Batteries produced annually by the Tesla Gigafactory (allegedly the world’s biggest battery factory) can store only three minutes worth of annual U.S. electric demand.

14. To make enough batteries to store two day's worth of U.S. electricity demand would require 1,000 years of production by the Gigafactory (world’s biggest battery factory).

15. Every $1 billion in planes that are produced leads to some $5 billion in aviation fuel consumed over the following two decades to operate them. Global spending on new jets is currently more than $50 billion a year—and rising.

16. Every $1 billion spent on data centres leads to $7 billion in electricity consumed over the following two decades. Global spending on data centres is currently more than $100 billion a year—and rising.

Realities about Energy Economics

17. Over a 30-year period, $1 million worth of utility-scale solar or wind produces 40 million and 55 million kWh respectively of intermittent power; by contrast, $1 million worth of shale well produces enough natural gas to generate 300 million kWh of continuous-output power over 30 years.

18. It costs about the same to build one shale well or two wind turbines: the latter, combined, produces 0.7 barrels of oil (equivalent energy) per hour; by contrast, the shale rig averages 10 barrels of oil per hour.

19. It costs less than $0.50 to store a barrel of oil, or its equivalent in natural gas, but it costs $200 to store the equivalent energy of a barrel of oil in batteries.

20. Cost models for wind and solar assume, respectively, 41 percent and 29 percent capacity factors (i.e., how often they produce electricity). Real-world data reveal as much as ten percentage points less for both (i.e., wind turbines and solar arrays are not "on" anywhere near as much as people think they are). That translates into $3 million less energy produced than assumed over a 20-year life of a 2-MW $3 million wind turbine.

21. In order to compensate for "episodic" wind/solar output, utilities use backup generators, i.e., oil- and gas-burning reciprocating engines (big cruise-ship-like diesels), three times as many of which have been added to the U.S. grid since 2000 as in the 50 years prior to that. (Just one way solar and wind sit on the back of hydrocarbons.)

22. Wind-farm capacity factors have improved at about 0.7 percent per year; this small gain comes mainly from reducing the number of turbines per acre leading to a 50 percent increase in average land used to produce a wind-kilowatt-hour.

23. Over 90 percent of America’s electricity (60 percent of NZ's), and 99 percent of the power used in transportation, comes from sources that can easily supply energy to the economy any time the market demands it.

24. By contrast, wind and solar machines produce energy an average of only 25 to 30 percent of the time, and only when nature permits. Conventional power plants can operate nearly continuously and are available when needed.

25. The world-wide shale revolution collapsed the prices of natural gas & coal, the two fuels that produce 70 percent of U.S. electricity (and still 28% in NZ). But electric rates haven’t gone down, rising instead by 20 percent since 2008. Direct and indirect subsidies for solar and wind consumed those savings (the NZ government, for example, has established a $400 million Green Investment Fund, a $27 million National New Energy Development Centre, and multiple renewable energy investments via the $3 billion Provincial Growth Fund and $200 million Regional Strategic Growth Fund. And in NZ new gas exploration has been shuttered)

Energy Physics… Inconvenient Realities

26. Politicians and pundits like to invoke “moonshot” language. But transforming the energy economy is not like putting a few people on the moon a few times. It is like putting all of humanity on the moon—permanently.

27. The common cliché: an energy tech disruption will echo the digital tech disruption. But information-producing machines and energy-producing machines involve profoundly different physics; the cliché is sillier than comparing apples to bowling balls. Only someone profoundly ignorant of physics could believe it.

28. If solar power scaled like computer-tech, a single postage-stamp-size solar array would power the Empire State Building. That only happens in comic books.

29. If batteries scaled like digital tech, a battery the size of a book, costing three cents, could power a jetliner to Asia. That only happens in comic books.

30. If combustion engines scaled like computers, a car engine would shrink to the size of an ant and produce a thousand-fold more horsepower; actual ant-sized engines produce 100,000 times less power.

31. No digital-like 10x gains exist for solar tech. Physics limit for solar cells (the Shockley-Queisser limit) is a max conversion of about 33 percent of photons into electrons; commercial cells today are already at 26 percent.

32. No digital-like 10x gains exist for wind tech. Physics limit for wind turbines (the Betz limit) is a max capture of 60 percent of energy in moving air; commercial turbines already achieve 45 percent.

33. No digital-like 10x gains exist for batteries: maximum theoretical energy in a kilogram of oil is 1,500 percent greater than max theoretical energy in the best kilogram of battery chemicals.

34. About 60 kilograms of batteries are needed to store the energy equivalent of one kilogram of hydrocarbons.

35. For every kilogram of battery that is fabricated, at least 100 kilograms of materials are mined, moved and processed. (So for every kilogram-equivalent of energy, around 6000 kilogram of material is mined, moved or processed .... not to produce it, just to store it.)

36. Storing the energy equivalent of one barrel of oil, which weighs 130 kilograms, requires 10,000 kilograms of Tesla batteries ($200,000 worth).

37. Carrying the energy equivalent of the aviation fuel used by an aircraft flying to Asia would require $60 million worth of Tesla-type batteries weighing five times more than that aircraft!

38. It takes the energy equivalent of 100 barrels of oil to fabricate a quantity of batteries that can store the energy equivalent of a single barrel of oil.

39. A battery-centric grid and car world would mean mining gigatons more of the earth to access lithium, copper, nickel, graphite, rare earths, cobalt, etc.—and using millions of tons of oil and coal both in mining and to fabricate metals and concrete. (Another way solar and wind sit on the back of hydrocarbons.)

40. China dominates global battery production with its grid 70 percent coal-fueled: EVs using Chinese batteries will create more carbon-dioxide than saved by replacing oil-burning engines.

41. One would no more use helicopters for regular trans-Atlantic travel—doable with elaborately expensive logistics—than employ a nuclear reactor to power a train or photovoltaic systems to power a nation.

* * * * * 

Mark P. Mills is a senior fellow at the Manhattan Institute, a McCormick School of Engineering Faculty Fellow at Northwestern University, and author of Work in the Age of Robots, published by Encounter Books.

This article first appeared at Economics 21, and is republished from Foundation from Economic Education.

Some more inconvenient maths here for New Zealand, courtesy of Professor Emeritus Michael Kelly, of Cambridge University, that puts James Shaw's so-called "NET ZERO" into perspective for New Zealand [hat tip Kiwiwit]:

42. Just to replace NZ's vehicle fleet and industrial heating with electricity, NZ would need to increase electricity production to 2.7 times its current output, at a cost of $550 billion! That's around 26,300MW. Currently under construction are just 3 power stations, with projected capacity of barely 290MW -- around 90 times too little!


Anonymous said...

By now in the debate I'm more concerned about how badly we're going to screw ourselves up with this nonsense, possibly by putting ourselves into an irreversible situation, than I am about fighting these idiocies.

Yet I regret to say that it is only when ordinary people crash into the world of less reliable energy with massive cost increases that we will see politicians backing down.

Anyway, a couple of years ago I followed up on some old posts of yours about NZ power by updating the figure to recent times, NZ Power Blows. Some of the data I have is a little off from this article and one of your sources (of which I was not aware when writing the original post); I estimated in PetaJoules and have been informed by a power engineer commentator that that's a trickier calculation than you'd think and he sticks with MWh etc.

However, my overall point jibes with yours; to cope with "the electrification of everything" NZ would have to more than double it's current power production and there is just no way to do that - short of nuclear energy. :)

Anonymous said...