By Steve Goreham
Originally published in Communities Digital News.
The global energy outlook has changed radically in just six years. President Obama was elected in 2008 by voters who believed we were running out of oil and gas, that climate change needed to be halted, and that renewables were the energy source of the near future. But an unexpected transformation of energy markets and politics may instead make 2014 the year of peak renewables.
In December of 2007, former Vice President Al Gore shared the Nobel Peace Prize for work on man-made climate change, leading an international crusade to halt global warming. In June, 2008 after securing a majority of primary delegates, candidate Barack Obama stated, “…this was the moment when the rise of the oceans began to slow and our planet began to heal…” Climate activists looked to the 2009 Copenhagen Climate Conference as the next major step to control greenhouse gas emissions.
The price of crude oil hit $145 per barrel in June, 2008. The International Energy Agency and other organizations declared that we were at peak oil, forecasting a decline in global production. Many claimed that the world was running out of hydrocarbon energy.
Driven by the twin demons of global warming and peak oil, world governments clamored to support renewables. Twenty years of subsidies, tax-breaks, feed-in tariffs, and mandates resulted in an explosion of renewable energy installations. The Renewable Energy Index (RENIXX) of the world’s 30 top renewable energy companies soared to over 1,800.
Tens of thousands of wind turbine towers were installed, totaling more than 200,000 windmills worldwide by the end of 2012. Germany led the world with more than one million rooftop solar installations. Forty percent of the US corn crop was converted to ethanol vehicle fuel.
But at the same time, an unexpected energy revolution was underway. Using good old Yankee ingenuity, the US oil and gas industry discovered how to produce oil and natural gas from shale. With hydraulic fracturing and horizontal drilling, vast quantities of hydrocarbon resources became available from shale fields in Texas, North Dakota, and Pennsylvania.
From 2008 to 2013, US petroleum production soared 50 percent. US natural gas production rose 34 percent from a 2005 low. Russia, China, Ukraine, Turkey, and more than ten nations in Europe began issuing permits for hydraulic fracturing. The dragon of peak oil and gas was slain.
In 2009, the ideology of Climatism, the belief that humans were causing dangerous global warming, came under serious attack. In November, emails were released from top climate scientists at the University of East Anglia in the United Kingdom, an incident christened Climategate. The communications showed bias, manipulation of data, avoidance of freedom of information requests, and efforts to subvert the peer-review process, all to further the cause of man-made climate change.
One month later, the Copenhagen Climate Conference failed to agree on a successor climate treaty to the Kyoto Protocol. Failures at United Nations conferences at Cancun (2010), Durban (2011), Doha (2012), and Warsaw (2013) followed. Canada, Japan, Russia, and the United States announced that they would not participate in an extension of the Kyoto Protocol.
Major climate legislation faltered across the world. Cap and trade failed in Congress in 2009, with growing opposition from the Republican Party. The price of carbon permits in the European Emissions Trading System crashed in April 2013 when the European Union voted not to support the permit price. Australia elected Prime Minister Tony Abbott in the fall of 2013 on a platform of scrapping the nation’s carbon tax.
Europeans discovered that subsidy support for renewables was unsustainable. Subsidy obligations soared in Germany to over $140 billion and in Spain to over $34 billion by 2013. Renewable subsidies produced the world’s highest electricity rates in Denmark and Germany. Electricity and natural gas prices in Europe rose to double those of the United States.
Worried about bloated budgets, declining industrial competitiveness, and citizen backlash, European nations have been retreating from green energy for the last four years. Spain slashed solar subsidies in 2009 and photovoltaic sales fell 80 percent in a single year. Germany cut subsidies in 2011 and 2012 and the number of jobs in the German solar industry dropped by 50 percent. Renewable subsidy cuts in the Czech Republic, Greece, Italy, Netherlands, and the United Kingdom added to the cascade. The RENIXX Renewable Energy Index fell below 200 in 2012, down 90 percent from the 2008 peak.
Once a climate change leader, Germany turned to coal after the 2012 decision to close nuclear power plants. Coal now provides more than 50 percent of Germany’s electricity and 23 new coal-fired power plants are planned. Global energy from coal has grown by 4.4 percent per year over the last ten years.
Spending on renewables is in decline. From a record $318 billion in 2011, world renewable energy spending fell to $280 billion in 2012 and then fell again to $254 billion in 2013, according to Bloomberg. The biggest drop occurred in Europe, where investment plummeted 41 percent last year. The 2013 expiration of the US Production Tax Credit for wind energy will continue the downward momentum.
Today, wind and solar provide less than one percent of global energy. While these sources will continue to grow, it’s likely they will deliver only a tiny amount of the world’s energy for decades to come. Renewable energy output may have peaked, at least as a percentage of global energy production.
Steve Goreham is Executive Director of the Climate Science Coalition of America and author of the book The Mad, Mad, Mad World of Climatism: Mankind and Climate Change Mania.
Alternatively, technology in renewables may improve over the next 3 or 4 decades, rendering it a worthwhile investment in 2050?? I include in that, modes of renewable energy which have neither been conceived yet nor developed into prototypes, demonstration plants or commercial scale undertakings……
the sorry state in Australia is the scrapping of the carbon tax has hit a brick wall with labour and the dumb greens have stopped PM Tony Abbott so far in scrapping the carbon tax which is destroying Australian industry, the green rat bags are all very happy can you believe that
What is not discussed is the cost of decommissioning renewable energy generation. For example think of all the concrete and turbines that will have to be disposed of safely. This will not be insignificant!
What did they do? Did they pioneer fracturing, as Goreham claimed the US had done? Here’s what you offer as proof:
Those users’ countries pioneered the consumption of natural gas, not its production.
At 10:06 PM on 1 March, cnxtim groused:
Sorry, but all indications are that the combination of dirigible multiple-shaft horizontal drilling (to make methane and liquid petroleum economically viable from extremely deep strata like that of the Marcellus Shale), fractional casing perforation, and hydraulic fracturing – which are all subsumed by the expression “fracking” – really was first effected by American petrochemicals extraction engineers here in these United States.
Live with it.
There has been a bounce in renewable energy shares in the past year, but nothing like what yours have seen. A large part of it has come from the EC’s recent vote to buy carbon trading permits (subsequent to Goreham’s claim of the opposite) and from Obama’s push to close down coal power plants. Another part of it has come from the enthusiasm of greenie investors for the sector. I doubt that this bounce is sustainable.
Bill H says:
March 1, 2014 at 10:09 pm
Given that the EU is no longer subsidizing wind farms
Bill, this is simply not ‘completely’ true. As Obama le Menteur said “there is more than one way to skin a cat”.
The EU is forcing members to subsidise bird mincers through their co² directives. Note directives not rules or suggestions. They are dictators, they direct.
Hydraulic “fracking” as others have noted isn’t a “new” technology … its been around in the US since the mid 1900’s … commercial viability came more recently in the 1980’s as horizontal fracking began.
http://en.wikipedia.org/wiki/Hydraulic_fracturing_in_the_United_States
New Zealand power generation and demand:
http://www.lincoln.ac.nz/PageFiles/12814/NZ-electricty-map.png
Look! Almost no coal (half of one power station), a little bit of wind, almost no solar PV.
Otherwise mostly hydro and geothermal.
Yeah, so much for the “sustainable” in the energy and development scam.
The only coal fired power stations being closed are the very old low capacity and ineficient ones, mostly in the USA. None of the large high capacity coal stations have closed, not even in the USA where they do more gas fracking than anywhere else in the World. Meanwhile Germany and especially China are building new generation larger and significntly more efficient coal fired power stations. Worldwide overall energy generation by coal is increasing. A terrible waste of a valuable chemical resource.
Thorium is what we should be moving towards. If only all the money that has been wasted on so called renewables had been put into developing Thorium power. Appalling short sighted policies, that’s what politicians do best.
It seems the good news for carbon free sources of energy ended in 1999.
rogerknights says:
March 2, 2014 at 1:19 am
fredb says:
March 1, 2014 at 11:10 pm
Funny story. My renewable energy shares have risen from $4 to $18 in the last year. If that’s evidence of decline, roll on decline
Roger, FredB is largely correct. Vestas’ shares have shown a rock solid rise over the last 3 years and continue to hold their ground. Green investors are putting large sums of money into the market based on EU and government promises worlwide to continue with the subsidise. In the UK, wave technology is beginning it’s meteoric rise through large scale investments from other countries because the UK CC act is still pumping huge subsidies into the enrgy market.
The UK is in dire straits, IMHO, because they will be forced, by the EU and their own CCAct, to close several coal fired stations in 2015 with no backup technology in place.
The dismissal of their legacy polititians is their only hope but the people do not have either the intellect or the courage to do that.
INTERESTING TIMES ARE COMING !
ConfusedPhoton says:
March 2, 2014 at 1:06 am
What is not discussed is the cost of decommissioning renewable energy generation. For example think of all the concrete and turbines that will have to be disposed of safely. This will not be insignificant!
There is no cost. The green generators will go bust and leave their merde in situ to rot away. What’s not to like about green technology.
John writes: ” Stopping the Planet from warming and the sea from rising was going to be the good news.” He should declare victory. That dang’ed ol’ planet did stop warming. Good job Obama!
“If only all the money that has been wasted on so called renewables had been put into developing Thorium power. Appalling short sighted policies, that’s what politicians do best.”
But what makes us think the government won’t come up with appallingly short sighted strategies to make Thorium uneconomic. That’s the problem when the government starts to pick winners and losers. It’s really bad at it.
Janice, Fred, Wellington, Insiders Trading, Other disinterested persons:
I sold my SPWR stock the day after Christmas, 2012, at $5.50. Today, it’s $33.13. Some companies prosper, others don’t. Individual investment transactions tell nothing about industry trends. Remains to be seen how various companies fare as government incentives fall away.
: > )
@ur momisugly Stephen Richards. “The dismissal of their legacy polititians is their only hope but the people do not have either the intellect or the courage to do that.”
The people have been brainwashed, but as information about the real state of the climate gradually leaks out to the wider populace that situation will change. The UK people have shown courage in adversity before and I believe will do so again shoud the need arise. Intellect is not necessarily required, ever colder winters combined with ever climbing energy prices will serve just as well. That process will speed up as the “pause” continues and especially so if the slight cooling that we have seen over the last 6 years steepens as must be inevitable given the prolonged low solar high and the increasing likelyhood of the next solar cycle being still lower. Not to mention a negative PDO and a soon to go negative AMO.
“Legacy politicians”, fabulous phrase, I love it.
@Bill H
“Given that the EU is no longer subsidizing wind farms I suspect that there will be piles of rusting steel soon and a very ugly eye sore… But then we knew this was coming.”
Absolutely right. Wind turbine companies went bust and solar panel manufacturers as well. But then the real problem occurs: it’s been the chinese that bought the remainders almost for nothing and then walked away with very sophisticated technology smiling like fat copy cats . And in consequence, more jobs will be lost all over the world. Competition is good, monopoly isn’t at all. I’m afraid we’re on the road to oligopoly already. I think that reasonable subsidies should be given to keep up with state-of-the-art technology.
The problem with doomers and peak oilers is they assume technological innovations are not taking place in the background. I found out that at least back to the 1960s a few patents were filed techniques to recover shale oil and gas via hydraulic fracturing. In 1976 Othar Kiel introduced high rate pumping for “hesitation” or “dendritic” fractures. Today Kiel’s ideas are used by some in the the shale gas industry.
http://www.thepttc.org/newsletter/v17n1.pdf
These very same kind of assumptions are made about future sources. Think methane hydrates and work being carried out into nuclear fusion. OK it’;s always “just a decade away” but it just needs ONE very important breakthrough and it’s a new ball game.
Al Gore saw the writing on the wall a couple of years back and withdrew his investment company’s holdings in renewables. When Al Gore gets out you know it will soon be over.
SEC records for Generation Investment Management LLP
http://www.sec.gov/Archives/edgar/data/1375534/000117266112000799/generation2q12.txt
J Martin says: March 2, 2014 at 1:38 am
Thorium is what we should be moving towards. If only all the money that has been wasted on so called renewables had been put into developing Thorium power. Appalling short sighted policies, that’s what politicians do best.
The better use for all those subsidies would have been the development of electrical storage to overcome intermittency, the Achilles heel of renewables. Governments should be subsidizing only those (essential) areas that the private sector can’t. Wind turbines are as efficient as they are ever going to get, and thorium and increases in solar electric efficiency will come of their own. They don’t need subsidies.
If those billions had been spent on storage, however, we might today be in a position where we didn’t need to build a megawatt of reliable conventional to back up every megawatt of intermittent renewable.
But their share has not risen in the energy mix for a long time now despite the hullabloo. As for China and coal use it seems they have other plans.
The USA maybe hell bent on closing its coal fired power stations but COAL MINING and exports continue. Where do you think that coal goes to? Answer: China and other Asian nations.
Solar and wind will likely never be commercially viable in any large scale basis. They require massive subsidies, and drive up electric costs significantly where used. They currently pay little or nothing towards the grid despite their causing significant problems and spikes due to their intermittency problems. And presently in many cases renewables are receiving retail rates for power fed to the grid – which is wholly unsustainable – if you sell to the grid you should be paid the same or similar wholesale price, a [price that reflects the operating costs of the grid, and covers any work needed to the grid to handle the variable extra power.
Wind and solar will still also need virtually 100% stand alone dedicated backup power – as their capacity factor is in the low 20% or less range. Even in a best case area the sun doesn’t shine and the wind doesn’t blow the vast majority of the time. Sometimes for days on end.
For every watt of wind or solar generation there must be a watt of fossil fueled conventional backup generation … running online 24/7/365 – to handle power demands when solar and wind stop. That backup generation must come from inefficient and dirtier peaking load plants, that can provide power on demand … as compared to much more efficient and clean base load plants that run at near full load all day, every day year round.
Germany found emissions have increased with the addition of significant solar renewable energy – I believe it was 1.5% increase in emissions, vs a decrease of appx 1.3% annually in the EU … net appx 2.8% increase in emissions by using solar.
The only possibly viable option is small scale rooftop solar … provided IMO they also have natural gas backup generation onsite as well. And provided they receive wholesale costs for any power sold to the grid, AND pay their fair share of the costs of operating and maintaining the grid.
The economics of large scale solar are simply ridiculous, in many ways. The huge Ivanpah solar farm recently in the news (for frying large numbers of birds etc) covers some 3,500 acres of land with massive mirror arrays focused on a massive 459 foot tall tower. Cost $2.2 billion with $1.6 billion of that from a federally guaranteed loan.
It allegedly provides power for 140,000 homes. Left out of all the press releases is the capacity factor is under 25% … a conventional base load power plant provides power more than 90% of the time – the Ivanpah site capacity factors is claimed at 28.74% – in my opinion based on other info, that is exaggerated.
Compare Ivanpah with its 377 MW nameplate capacity, appx 28.74% capacity factor at best, and supplying energy for an alleged appx 140,000 homes during peak hours of the day, to a single base load plant like XCEL Energy Sherco Power plant in Minnesota … with its 2,400 MW nameplate capacity and 95+% capacity factor, the XCEL Sherco plant powers more than 2 million homes essentially all the time.
Joe Adam-smith says:
March 2, 2014 at 12:29 am
Please use proper terminology, folks – don’t fall into the Greenist DoubleSpeak. Firstly, use wind turbines, not windmills Windmills use the power of the wind to mill (ground) corn. Second, don’t use windfarms. Sounds green and environmentally friendly. Call them what they are – wind power stations. (Well they ARE supposed to produce power…)
I agree that we should call these collections of wind turbines by their correct name, that is subsidy farms . They only exist while subsidies are available, the subsidies are only paid if wind turbines are erected, as soon as subsidies stop the wind turbines are abandoned. Hence they are subsidy farms , generation of electricity is only a by product of subsidy farming.