The smart money is starting to abandon the CO2 vessel
Guest essay by Fred F. Mueller
The IPCC and its supporters in the media, in NGO’s and in governments have taken advantage of the issuing of the newly released 5th Assessment Report (AR 5) to mount an all-out PR offensive promoting their view of CO2-induced doom for humanity using any and all news channels and tabloids as pitchmen. Despite growing distrust in the general public, few people have the mettle to stand their ground against such a massive persuasiveness. How can an average citizen acquire the steadfastness to brush off this veil of lies? The answer is simple: follow the money trail.
When confronted with overwhelming “scientific evidence”, one should keep in mind the basic question any criminal investigator learns to ask whenever being confronted with a puzzling case: who is benefitting? In the case of “climate change science”, the answer is simple, since in the past decades a trillion-dollar-business has sprung up providing all sorts of equipment and services intended to lower what is dubbed our “CO2 footprint”. Whole sectors such as solar and wind energy farms have grown like mushrooms promising to supply our nations with so-called clean and green energy.
These sectors have one common mark distinguishing them from normal business activities. They do not provide us with a better or a cheaper product, one that we would want to buy, but rely on subsidies guaranteed by legal frameworks instead. During the past 20 years, they have grown from modest to big to supersized and now feature the proportions of a cuckoo hatchling in the nest of a tiny songbird. This powerful business sector has all the money and resources to pay for adequate services in the world of science. And modern science is by no means impartial. Scientific institutions are business units with a well-developed service orientation that will of course avoid anything that might displease their sponsors. The same applies of course for state-run agencies such as NASA or NOAA, who are supervised and alimented by political bodies packed with green-minded politicians. So forget about any claims of “pure” science, ignore colorful screenshots and simply sniff for the smell of money – and you’ll be on the right trail.
Would the business plan please stand up?
As in the case of any economic bubble, the “climate saving” industries have been building up on promises of returns that would be delivered sometime in the future, in the form of reduced CO2 emissions and lower energy costs due to reductions in fossil fuel consumptions. But unfortunately, it looks like nobody bothered to deliver a sound cost or return on investment calculation: the proponents of the green energy revolution simply ignited a frenzy resulting in the chaotic buildup of all sorts of “green energy” plants in parallel to existing power supplies, without any risks for investors thanks to legal frameworks guaranteeing ample monetary returns for lengthy time periods. In Europe and more particularly in Germany, where the already strong green ideology has been overtaken by a political leader raised in a communist country, this policy has been exaggerated to a point where the financial tolerance limits even of a sound economy start to be transgressed. For a number of reasons, Germany has thus become the nexus of a host of developments that will ultimately result in the rupture of the “green energy and climate rescue by CO2 reduction” bubble.
The German money sink
Germany currently has committed itself to reduce its CO2 emissions by achieving an 80 % share of “renewable” power generation by 2050 while at the same time shutting down its nuclear power plants, which had been contributing 20-30 % of its power supply. Currently, “renewables” including biomass and water contribute about 22 % to Germany’s power production, with the share of wind and solar reaching roughly half of this figure. But for this rather modest achievement, the German populace has been served with a commitment to a € 370.- billion (US-$ 500.- billion) bill, payable over the next 20 years, picture 1. As a consequence, the average German household will have to pay north of € 0.30 (US-$ 0.40) per kWh by 2014. While the majority of the population is up to now indulgently accepting this rip-off, the industry is increasingly feeling disadvantaged in comparison to international competitors benefitting from substantially lower power supply tariffs. But the real challenge for Germany lies in the fact that in order to reach its 80 % “renewable” objective, the sum already spent would have to be more than quadrupled to more than € 2 trillion (US-$ 2.7 trillion). Even for Germany’s rather robust economy, such a sum represents a burden that might well bring down even this sturdy horse.
Picture 1. The German population is burdened with an ever-growing financial commitment based on 20-year offtake obligations at guaranteed prices
No returns: Neither with respect to power supply…
Given these enormous expenditures, one would normally expect to see some kind of return by the prospect of an adequately ample supply of “clean” electric power able to supplant a certain portion of the “dirty” energy produced by burning coal or gas and a corresponding amount of fossil fired production capacity rendered obsolete. But this is not the case, due to the fact that wind and sun are following their own rules. In the case of Germany, where the minimum (nighttime) power supply requirement is around 30000-40000 MW and the max grid load on winter working days can reach 85000 MW, a total of 66000 MW of nominal wind and solar power generation capacity has already been connected to the grid. Nevertheless, there are sometimes extended periods of time when neither the sun nor the wind are inclined to fulfill their duties, as documented by picture 2 showing the situation on Aug. 22nd, 2013. In the time between 05.00 and 07.00 o’clock in the morning of that day, the total power provided by both sources barely transgressed 500 MW, less than the output of a single gas-fired power plant. If one compares this to the needs of an highly industrialized nation with 80 million inhabitants, it would probably not even have sufficed to power the standby lights of the country’s electronic devices. In other words, virtually the complete fleet of German conventional power stations has to remain in standby mode in order to secure the grid supply in case the “renewables” suddenly decide they deserve a more or less prolonged rest. And in the case of coal-fired plants, the term “standby” means they must continuously burn fuel to maintain a certain minimum level of boiler pressure and temperature in order to be able to react quickly to changes in demand.
Picture 2. Production of electric power from wind and photovoltaic plants in Germany on Aug. 22nd, 2013. In the early morning hours, the total fell below 600 MW, not even enough to keep the nation’s standby lamps glowing (Data source: transparency.eex.com)
nor to CO2 reduction
To make things even worse, the decision of the German government to shut down nearly half of the country’s nuclear power generation plants in the wake of the Fukushima disaster has deprived the country of a major carbon-free power generating source. The result is that between 2000 and 2012, despite enormous expenditures in wind and solar generating capacities, the quantity of CO2 emitted from power generating sources has not been reduced at all, picture 3. And that situation will further deteriorate when by 2022, a further 16-17 % of the current power generating capacity still supplied by nuclear plants will be shuttered as scheduled. Worse still, before even taking into consideration any cost aspects, one must take into account the fact that a substantial portion of this lost capacity cannot be replaced by wind or solar power for technical reasons, since further increasing their share would simply jeopardize the stability of the grid. A projection of the power production breakdown by CO2 sources reveals that by 2022, when the last German nuclear power plant will be shuttered, the country will have spent at least around US-$ 1 trillion in order to achieve a 10 % increase in CO2 emissions linked to power generation. Not quite what was promised…
Picture 3. Even after 12 years of massive funding of „renewable“ power production, the CO2 output from German power stations shows no decline (figures in Mio. t CO2/ year)
The smart money starts to leave ship
This scenario implies some very interesting consequences. First of all, the CO2 reduction policy currently pursued by our political leaders is doomed to fail, albeit one cannot predict when and how exactly, but fail it must. Producing such mediocre results for so much money thrown at the CO2-“problem” will ultimately be met with growing resistance since the financing of other vital parts of society will be negatively affected. And there is one natural force the doomsday prophets seem to completely underestimate: the explosive reaction of masses of people that feel they have been let down by their leaders. To understand this lesson, one might just have a look at the French Bastille or the many empty palaces in Austria, Russia, Italy, Greece and so on.
While the IPCC and a number of key political figures such as Merkel and Obama are stubbornly staying the course, the smart money has already started to react. More and more lifeboats can be seen leaving the ship. The giant Desertec project aiming at producing solar energy for Europe in the Sahara desert is virtually dead in the sand. Spain is severely cutting back on its “renewable” subsidies. The German solar sector is in free fall, with big players such as Siemens and Bosch closing shop at a loss. Wind energy seems to be more robust, but even the market leader, Danish company Vestas, is experiencing severe headwinds. And last but not least, some governments such as those of Czechia and Australia prove their common sense by throwing useless “renewable” policies over board. As soon as this trend will have gained enough momentum, one might expect to see a new generation of scientists emerge producing nice colorful computer charts proving beyond doubt that CO2 is beneficial for plant growth and thus for feeding our populations.
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CO2 hoax notwithstanding, Germany’s commitment to spend half a trillion dollars over 20 years on renewable energy sources strikes me as a better waste of money than my own country’s waste of a half-trillion dollars ANNUALLY on its peacetime defense budget. I for one would feel A LOT SAFER if that money was spent on windmills rather than stealth bombers. Both technologies, by the way, are intimately connected to our energy needs — but only one creates a lot of dead people (and revenge-minded relatives) as a major byproduct of production activities. .
“The smart money is starting to abandon the CO2 vessel”
But not the real money, my tax dollars
There are two rationales for subsidizing renewable energy.
One, green energy is a public good, in and of itself, because it reduces CO2, lowers pollution and limits the risk of being dependent on foreign energy sources. Well, that is clearly a very limited benefit here and everywhere. The benefit is between 0% and 20% of what green promoters and governments think. It also makes some people feel better but why should I subsidize that. Let them do it. And it is seems like they are willing to do so – whenever a 25% premium option to buy green energy is put up, it often sells out in a short period of time. The green energy producers don’t want to rely on this but instead want a guaranteed 20 year government commitment.
Second, green energy should be subsidized so that it economics improve in the long-term, through reducing the costs of producing the components and through new technological improvements that will come. Well the costs are likely never going to come down enough to make them economic. The physics of wind and solar is the problem here. The physics is not good enough to produce economic power. Next, if technological improvement is what is desired, then just subsidize research. Don’t subsidize on-going operations of huge facilities using old technology that doesn’t work. That doesn’t lead to any technological improvements. And then, there is the physics again which technology can not overcome in any event.
The interesting question for me is why do smart people keep returning to dumb ideas, generation after generation?
“Renewables” have been shown to not be sustainable or renewable for generations.
The history of apocalyptic doom predictions has been shown to have been one of total failure.
The climate doom culture has, since the Noah flood myths, been shown to be…mythical.
Yet here we are, serious politicians and academics and opinion makers so committed to AGW as to be willing to trash good economies in the name of their mythic obsessions.
Why?
Large cities like Hamburg were only kept lit, because large energy intensive factories in it like the ArcelorMittal steel mill were persuaded to shut down. They did so but of course were compensated by the government and already, similar arrangements are being made across Germany for this coming Winter by large industrial concerns.
http://thepointman.wordpress.com/2012/10/26/examples-will-have-to-be-made-germany/
Pointman
But…but…the science has all been peer reviewed-
http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/peer_reviewed_nonsense/
Well said indeed. Cui bono. It is quite remarkable that nuclear and hydro do not count as “low carbon” energy. “Low carbon” means only the wind and solar that these particular people are collecting subsidies for. NB, “renewables” is a less accurate term than “unreliables”.
re: “ nobody bothered to deliver a sound cost or return on investment calculation” – we now have the 50:1 project, so we know the return is stunningly abysmal.
Dudley Horscroft says “ Unfortunately not so in respect to Australia. We have just elected a government determined to abolish the Carbon Tax, but to have 5% of total energy supplied by ‘renewable’ sources (by 2020) still remains government (and opposition) policy.“. That may be true, but 2020 is two more elections away, plenty of time for a policy change to occur before any actual action. Here’s hoping…..
Bill Illis – “just subsidize research” – spot on.
Great post. Here in mass. Sep 23 front page of boston globe headline ” mass utilities
Go for wind power”. The comments in this article are comical and sad. These people do not have a clue. Connecticut has a ban on wind but will buy it from New hampshire and maine. Hippocrits.
Btw pres. Obuma , norway has a carbon capture facility you can buy real cheap. No co2 miles on it
The German people didn’t get the message yet., Merkel recently gained many seats in parliament.
“Germany currently has committed itself to reduce its CO2 emissions by achieving an 80 % share of “renewable” power generation by 2050 while at the same time shutting down its nuclear power plants, which had been contributing 20-30 % of its power supply. ”
The numbers for Germany are correct (currently 24bn EUR a year in subsidies, paid for by electricity surcharges; resulting in 300 EUR/yr/capita extra cost); but I’d like to add: Electricity is just 1/7th of German Primary Power consumption; 3/7th being heating; another 3/7th being transportation (fuels). Looking through my personal expenditure, transportation clearly comes out on top.
A superficial look at the renewable energy madness in Germany would say, this gives Germany a competitive disadvantage and results in reduced living standards and loss of growth.
A more geopolitical look or Realpolitik look at it comes to a rather different conclusion:
1) The redirected capital is redirected because of a long term strategy
2) The project is the moon-landing / the Ziggurat of the territory currently called Germany
3) Together with the Qatar-Syria-Turkey gas pipeline project (destabilization of Syria; repeated propping up of Greece; “liberation” of Albania; Trans-adriatic pipeline project) its goal is to acquire energy sources for the EU territory.
4) “Saving The Planet” is how it is sold to the masses.
So the summary is.
Like any other political elite, the German elite uses the CO2AGW theory as a political lever. The Left has always used it to demand de-industrialization; Thatcher has used it as a bludgeon against the unions; the UN/Club Of Rome/CFR has used it as “the common enemy to unite us” (i.e. to achieve the NWO); the German elite (bloc parties / Bilderbergers) use it to acquire new energy sources. If they can buy farmer votes via the biofuel mandate (GLOBE international’s main objective being promotion of biofuel) all the better.
The first criticism at all this is that the project is based completely on deception. The EU commission and German bloc parties insist on playing the holier-than-thou game and lose all credibility. All EU media are now lying, censored versions of Soviet times Pravda.
Yet for the moment the bloc parties cling to power, and the German populace is apathetic; with the usual do-gooder faction even believing in the “save the planet” argument; the “intellectuals” being useful idiots as usual.
Richie says:
October 6, 2013 at 5:45 am
“CO2 hoax notwithstanding, Germany’s commitment to spend half a trillion dollars over 20 years on renewable energy sources strikes me as a better waste of money than my own country’s waste of a half-trillion dollars ANNUALLY on its peacetime defense budget.”
The Empire – of which Germany is a part – needs legions. These legions are, on a per capita base as a fraction of total GDP / capita, in fact cheaper than ever since end of WW 2 (last graph):
http://www.die.net/musings/national_debt/
The price of energy just across the border will ultimately bring down the “green” industries, or at least force them into honest (unsubsidized) competition. Ironically, it will be the less-free countries that provide that competition since they’re (at least some of them, e.g., China, Russia) least likely to plow money into green projects. There are far more efficient, and easier, ways for them to skim the funds they need for their own pet projects than to set up a massive green energy subsidization scheme.
Germany is now finding this out; Britain soon will; Spain and Australia already have. The green politicians (really socialists) in those countries have rapidly rendered their exporters uneconomic and now the populaces will pay, either in higher taxes, higher prices, or by being forced to move to a country that is not in the process of bankrupting itself.
What people often fail to realize is that energy underlies virtually everything they consume. If energy is made expensive, consumption becomes correspondingly expensive. Ultimately, people will gravitate toward those countries that maintain cheap energy prices, whether they do so by simply buying their consumables from those countries, or by going so far as to relocate to them.
Al Gore has already bailed out on green investments. See my references here.
Rod Everson says:
October 6, 2013 at 7:42 am
“Ironically, it will be the less-free countries that provide that competition since they’re (at least some of them, e.g., China, Russia) least likely to plow money into green projects. ”
Whether Russia or China are still “less free” than the EU is arguable. The EU’s
“European Council on Tolerance and Reconciliation”
just prepares the end of free speech for the EU; insofar as it still exists.
The EU with its controlled media bloc does a good job of pretending it’s a free society though. All Germans I talked to don’t even know that the Lisbon treaty allows arbitrary killings of whatever the EU determines to be insurgents.
The awful numbers for wind and solar have always been sitting there for anyone with a brain to see. But, “There is none so blind….”
“The smart money is starting to abandon the CO2 vessel”
Much smart money saw the long-term bubble and never invested.
Smart money but with PR sensibilities will be trapped until the media consensus says it’s not a problem, and even admits the hype was effectively widespread hysteria mixed with fraud.
Smart “legal” money will continue to extract profits as long as government makes it profitable. Favored tactic is to build a wind or solar farm, collect all up-front tax breaks, rebates, and other subsidies, then “sell” the operation to a new subsidiary for “market value”.
Small example: You put up a wind turbine for $10,000 in your costs, collect one-time 20% government energy-saver tax rebate of $2000, get project appraised for $13,000, set up new company that buys it from you for that. You collect $5000 in profit, new company is left to eventually go bankrupt trying to extract $13,000 plus debt interest from the turbine. Repeat.
As long as government allows it to profitable, smart-while-legal money will stay invested, as long as keeping up the hype keeps their business model profitable.
I don’t know much about solar power but I had a look at the mean sunshine hours for Birmingham (UK) for January which is 52.5 and February which is 73.9. From vague memory I recall that January and February are the coldest months too. Will Midas face difficulties without subsidies?
Hunter asks:
“The interesting question for me is why do smart people keep returning to dumb ideas, generation after generation?”
Because (in my humble opinion) we humans are evolving far too slowly on an intellectual level. In any number of ways, the evolutionary intellectual level where far too many of us are still at today has not really improved much from Medieval times. The ones that believe in CAGW and so-called “green” energy like wind and solar today are the ones who think in largely (if not exclusively) in eco-ideological or eco-religious terms rather than in scientific terms using facts, logic and reasoning. If they lived in the late Middle Ages, these are the same ones who would be burning people at the stake as witches or heretics rather than fully embracing intellectual thought.
And in some ways, they are still doing this. Today’s “witches” and “heretics” are the AGW skeptics and those who understand that the science and economics behind wind and solar simply don’t cut it. These are the intellectual thinkers rather than the “religious” believers. The latter are figuratively burning the former at the stake today by labeling them “deniers”, “flat-earthers”, and (as some have done) demanding that they be outlawed and locked up if not executed.
Of course, one could argue that a lack of education has a lot to do with this as well, and I can’t argue with that notion. Others might say that it’s simply in or genes, our DNA, to think and view the issues today in the manner that we do.
At any rate, it will (I believe) be a long time time in the future before we humans move beyond the tendency to produce myths like AGW and wind and solar energy that are wrongly accepted as credible. And it may take an equally long period of time before we move beyond producing false belief systems like AGW for political reasons as well. It’s all way too sad for an intellectual thinker to contemplate.
From hunter on October 6, 2013 at 6:32 am:
Because renewables are cheap when you pretty much have nothing else and can wait a bit.
You have a farm in the middle of nowhere and well water to pump. You’re busy running the farm. You could get a person to hand pump, but you got to pay and feed them, an ongoing expense. About the same for a draft animal, more expense and work.
Or you can put up a windmill to drive the pump. As long as you get enough wind often enough, it’s cheap, sustainable, just what you need.
And if a windmill breaks it’s normally fixable for a small fraction of the initial investment. With draft animals, good chance you’ll pay the initial investment again, but maybe with work you can salvage some leather and a few meals.
Of course the gold standard of renewables is water power, it’s the one that can be reliable enough to be there when you want it. If you have it, then you know it is the one that has been sustainable and renewable for generations when sited properly, barring the rare epic drought coupled with inadequate reservoir capacity.
Interesting announcement in Pure Energy Systems that might have a huge impact on this topic:
“The Switzerland-based company ST Microelectronics, one of the largest semiconductor companies in the world, has filed a patent application to the United States Patent Office for a Reactor for energy generation through low energy nuclear reactions (lenr) between hydrogen and transition metals and related method of energy generation. The application was filed in February of this year, and the inventors are listed as Ubaldo Mastromatteo and Federico Giovanni Ziglioli.”
The discusstion continues:
“The patent explains that a reaction is achieved by the absorption of hydrogen within an active metallic material (could be a number of metals such as Ni, Pd, Pt, W, Ti, Fe, Co and their alloys), applying heat, triggering the reaction and using a mechanism to control the reaction.
“Interestingly, the patent doesn’t beat about the bush and try and disguise the fact that this is a LENR reaction. They cite Pons and Fleischmann and explain that LENR is a legitimate reaction, even though it is hard to control. Since it has been claimed that USPTO has been known to deny cold fusion patents based on the fact that they don’t accept the legitimacy of the science, this is an interesting approach.
“ST Microelectronics is a major semiconductor company with 48,000 employees (11,500 working in R&D) and with revenues of over $8 billion in 2012. Having them working the LENR field could be a signal that leading scientists and researchers are now taking LENR seriously as a viable energy source.”
http://www.e-catworld.com/2013/09/st-microelectronics-files-lenr-patent/
Excellent article.
Not to forget, our current climate is remarkably stable and because of a couple centuries of warming, comfortable and highly food productive too.
Now if the climate were to take a sudden turn and plummet 5-9 degrees C, or actually rise 5-9 degrees C; energy requirements will skyrocket.
Economies of scale do not seem optimal in the green dream of renewable energy. Land does not get cheaper when buying or leasing it in quantity. Hand constructing turbines also does not get cheaper. Keeping solar cells clean and maintained is not getting cheaper.
Life expectancy of the renewable’s equipment is similarly dismal. Not only are people expected to dig deep to fund renewables, but they’ll have to dig deep and rebuild or replace all of the equipment multiple times in their lifetimes. Establish that existing wind turbines harm nearby residents or destroy enormous amounts of wildlife and they may need to be replaced far sooner. Sadly it is likely that replacing turbines rather than retrofitting turbines will be the least expensive method of updating to people and wildlife safe wind turbines.
Sooner or later people will realize that they’re never going to wake up and smell roses in the green renewable manure piles.
Research into green energy may be a good idea. When a researcher has a terrific green energy idea and can sell/prove the value of that idea to investors, then will worthwhile ideas advance. Politicians today all want to emulate JFK’s famous ‘moon’ challenge. Only all of the current approaches fail to set only one goal; instead they imply a goal and then tell people what the approved methods of achieving that goal are. In business it’s called micromanaging, riding herd, herding cats, or just plain demanding silk purses from pig ears. New paradigms just don’t jump out of the same old same old ways of thinking.
“Crash boom bang”
Haven’t read the article yet. But, I’m wondering who is the drummer boy from Illinois, and where the Purple Gang fits in.
I’m waiting to hear from Bang Ding Ow!
CD (@CD153) says:
October 6, 2013 at 8:42 am
“Because (in my humble opinion) we humans are evolving far too slowly on an intellectual level.”
It is a global “Peter Principle” in action. We have risen to the level of our incompetence.