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The "New Energy Economy": An Exercise in Magical Thinking

March 27, 2019

By Paul Homewood


There is a new report out from the Manhattan Institute, which exposes the illusions behind renewable energy:


Executive Summary

A movement has been growing for decades to replace hydrocarbons, which collectively supply 84% of the world’s energy. It began with the fear that we were running out of oil. That fear has since migrated to the belief that, because of climate change and other environmental concerns, society can no longer tolerate burning oil, natural gas, and coal—all of which have turned out to be abundant.

So far, wind, solar, and batteries—the favored alternatives to hydrocarbons—provide about 2% of the world’s energy and 3% of America’s. Nonetheless, a bold new claim has gained popularity: that we’re on the cusp of a tech-driven energy revolution that not only can, but inevitably will, rapidly replace all hydrocarbons.

This “new energy economy” rests on the belief—a centerpiece of the Green New Deal and other similar proposals both here and in Europe—that the technologies of wind and solar power and battery storage are undergoing the kind of disruption experienced in computing and communications, dramatically lowering costs and increasing efficiency. But this core analogy glosses over profound differences, grounded in physics, between systems that produce energy and those that produce information.

In the world of people, cars, planes, and factories, increases in consumption, speed, or carrying capacity cause hardware to expand, not shrink. The energy needed to move a ton of people, heat a ton of steel or silicon, or grow a ton of food is determined by properties of nature whose boundaries are set by laws of gravity, inertia, friction, mass, and thermodynamics—not clever software.

This paper highlights the physics of energy to illustrate why there is no possibility that the world is undergoing—or can undergo—a near-term transition to a “new energy economy.”

Among the reasons:

  • Scientists have yet to discover, and entrepreneurs have yet to invent, anything as remarkable as hydrocarbons in terms of the combination of low-cost, high-energy density, stability, safety, and portability. In practical terms, this means that spending $1 million on utility-scale wind turbines, or solar panels will each, over 30 years of operation, produce about 50 million kilowatt-hours (kWh)—while an equivalent $1 million spent on a shale rig produces enough natural gas over 30 years to generate over 300 million kWh.
  • Solar technologies have improved greatly and will continue to become cheaper and more efficient. But the era of 10-fold gains is over. The physics boundary for silicon photovoltaic (PV) cells, the Shockley-Queisser Limit, is a maximum conversion of 34% of photons into electrons; the best commercial PV technology today exceeds 26%.
  • Wind power technology has also improved greatly, but here, too, no 10-fold gains are left. The physics boundary for a wind turbine, the Betz Limit, is a maximum capture of 60% of kinetic energy in moving air; commercial turbines today exceed 40%.
  • The annual output of Tesla’s Gigafactory, the world’s largest battery factory, could store three minutes’ worth of annual U.S. electricity demand. It would require 1,000 years of production to make enough batteries for two days’ worth of U.S. electricity demand. Meanwhile, 50–100 pounds of materials are mined, moved, and processed for every pound of battery produced.

  1. Colin Brooks permalink
    March 27, 2019 11:28 am

    This is just the kind of detailed report that once was used to inform decision makers. Today it will fail because it is not ideology based 😦

    • keith permalink
      March 27, 2019 4:34 pm

      Yes, it will be quickly forgotten and go in the bin, especially in the UK and EU.

  2. GeoffB permalink
    March 27, 2019 11:40 am

    Excellent report…….but it is just going to be ignored. My mind is made up do not confuse me with the facts.

  3. peter stokes permalink
    March 27, 2019 11:41 am

    A paper with all the S’s – succinct, simple and sensible. Pity the Green zealots have none of those qualities of intellect. Until they take their bigoted blinkers off and come to their senses, then the likes of Gore and Musk will continue to pocket, their no doubt hard earned, cash.

  4. George Lawson permalink
    March 27, 2019 11:52 am

    I wonder whether the UK environment Secretary, Mr Michael Gove, will read the report, and more importantly, have the common sense to take its findings on board and change his thinking about our disastrous future energy supply programme.

    • mikewaite permalink
      March 27, 2019 1:43 pm

      It would be nice to think so but I suspect that shortly Mr Gove will not find himself in any position where his opinions have any effect on future energy supplies.
      Unless of course he “does a Davey ” and gets a nice sinecure with the “renewables” industry..

      • dennisambler permalink
        March 28, 2019 11:22 am

        Or get on the Advisory Board of the Grantham Institute, as Davy has done.

    • Gerry, England permalink
      March 27, 2019 1:45 pm

      Unlikely, given what we have learned throughout Brexit about the ability of all MPs to be ignorant and stupid, and unable to learn anything being constantly stuck in ‘broadcast mode’.

    • Derek Buxton permalink
      April 2, 2019 11:30 am


  5. It doesn't add up... permalink
    March 27, 2019 12:00 pm

    Off topic:

    A comparison of Beira as seen by satellite in Feb 2000 and March 2019

    The town is on the right bank of the estuary where it meets the sea according to the drawn boundaries. I suspect that were an earlier cloud free image available for 2000, the flooding might appear more extensive.

  6. A C Osborn permalink
    March 27, 2019 12:09 pm

    Ouch, that realy slays the “Great Green cause”.
    Reality bites very hard.
    But as others have said I doubt it will make much difference to the decision makers who live in La La land.

  7. Chris Reynolds permalink
    March 27, 2019 12:33 pm

    The girls in the Oxford school who are petitioning for more AGW teaching in schools should read this. Furthermore it should be compulsory reading for all pupils and their teachers.

    • Dave Styles permalink
      March 27, 2019 1:40 pm

      Exactly my first though as well

  8. Gamecock permalink
    March 27, 2019 1:54 pm

    A movement has been growing for decades to replace nations with one-world government.


    Due to cultural hegemony, the people won’t go along with it.

    What to do?

    Replace the people who won’t go along with it with people who will. Policy: unlimited immigration, to the point that borders no longer exist.


    Get rid of the people who won’t go along with it. Policy: renewable energy. Which will kill off 80% of the West’s population. Marketing strategy: The Malthusian idiocy of ‘Climate change.’

  9. Athelstan. permalink
    March 27, 2019 2:30 pm

    […] both here and in Europe—that the technologies of wind and solar power and battery storage are undergoing the kind of disruption experienced in computing and communications, dramatically lowering costs and increasing efficiency. But this core analogy glosses over profound differences, grounded in physics, between systems that produce energy and those that produce information.[/quote]

    “But this core analogy glosses over profound differences, grounded in physics, between systems that produce energy and those that produce information.”

    In one.

    green energy

    delusional politicians and effin moonbeams.

    And result: financial catastrophe and industrial suicide via the transport of the ‘green agenda’ – you know it.

    Why can’t they TPTB see it, or do they wish it upon western society.

    Conclusion: yes they do, welcome to impending self wrought oblivion.

  10. Peter Schofield permalink
    March 27, 2019 3:27 pm

    If the people who believe in the science of Climate Change are the same people who believe in the validity of the plan to replace fossil fuels with renewables, then they have rather undermined their own case

  11. It doesn't add up... permalink
    March 27, 2019 3:33 pm

    The technical limits of technologies in terms of efficiency of energy conversion do not really offer a good guide to cost. For example, coal fired generation is usually lower cost (excluding green taxes) than CCGT, despite being barely over half the energy efficiency in older stations: higher efficiency coal stations are much more costly to build, and usually are only justified when environmental legislation is “just right”. Gas is cheaper if you sit atop a plentiful shale supply (rather than just a resource).

    The same applies to PV: you can justify some expensive panels with high efficiency relative to limits if you have to pay large sums per kilo to lift them into orbit, but so long as land is cheap enough, low efficiency panels will be much more economic.

    It also applies to wind turbines. The most efficient peak at around 80% of the Betz limit at speeds close to their rated capacity (but efficiency is low at low wind speed and falls off once capacity is reached: the extra energy in the wind is simply not captured, but it matters less because a) high winds are less frequent, and b) the value of the output is usually much less unless you have a CFD guaranteed price). In fact, we are now seeing downrating relative to the Betz limit in modern designs for large turbines. This is because it can be advantageous to run a lower powered generator to a higher fraction of its power rating in typical wind conditions: an extra metre on blade length delivers ~2πR in extra swept area for low cost when R is already large. Big generators are expensive (all that Nd to try to reduce size of generator magnets) and require stronger structures to carry extra weight. This offsets the extra cost of the longer sails, while the taller hub height tends to increase the wind speeds experienced.

    Of course the real problems with these sources are the land they occupy for the output they produce, some of it very obtrusive, and their intermittent outputs dictated by nature, which require full backup from dispatchable sources. Storage to try to overcome these failings is prohibitively expensive, and in any case results in more and more energy being spilled uselessly when the stores are full, or the ability to absorb energy surpluses generated at midday in midsummer or in a strongish wind is constrained. They become very high cost solutions.

    Cost of course is the last consideration for renewables promoters. I came across this study recently:

    Click to access Navigant_Gas_for_Climate_The_optimal_role_for_gas_in_a_net_zero_emissions_energy_system_March_2019.pdf

    It advocates replacing natural gas with biogas, recognising that electricity storage even as pumped hydro is never going to cut it as an economic solution. However, the cost of the scheme and its impact on food production is glossed over. That won’t stop green politicians from seeking to impose it on us.

  12. March 28, 2019 11:33 am

    Selena Zito, a journalist from Pittsburgh, PA, predicted a Trump win. She traveled the back roads of many states (PA, OH, IN, MI, WI, etc.) and all she saw were Trump yard signs with an occasional Clinton one (I can say the same for WV). Rush Limbaugh alerted his listeners to what she was saying and her basis for the statements.

    After the election, she and another journalist with whom she collaborated wrote a book: “The Great Revolt.” They went back to these small towns in the same states and interviewed people who had become Trump supporters, but were not previously Republicans and why. These were average folks: small business owners, factory workers, etc. It boiled down to the fact that they had become oh, so aware that they were the forgotten people, deemed “unimportant” by the elite. Their lives and futures were being adversely affected by government policies, but no one listened. Trump, through his whole life, has been more comfortable around, admired and understood these people over the so-called “elites.” In his inaugural address, he said that the forgotten people were forgotten no more (with the elites glowering behind him) and he has kept this promise.

    Since the election, Selena Zito has conducted an extensive “field trip” program at Harvard. She takes students on a long trip through small town America. Although much of it is in New Hampshire, Vermont, NY, etc. it is to small towns. They either take buses or cars and travel back roads instead of Interstates. They stop in these towns and eat at local restaurants (no fast food chains) where they interact with the real people of those towns. These Harvard students are stunned by the way people live and think and act. Apparently they have never before ventured outside their bubble.

    From what I read in this blog, I think the UK is suffering from the same elitist bubble. You have a class which has grown up in a bubble, gone to school with others of the bubble and only fraternize with others of the bubble. Perhaps someone needs to take them on a Zito-like field trip to discover the real people instead of opining from atop their bubble.

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