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Green Deals are the best way to turbo-charge economic recovery from Covid-19-AEP

April 30, 2020
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By Paul Homewood

 AEP is off on his favourite hobby horse again!!

As usual it is full of the usual omissions and errors.

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Every big recession over the last forty years has been a body blow for green energy and the climate cause.

On each occasion, the strategic abundance and plummeting cost of fossil fuels blunted the drive towards substitution. Renewable start-ups were shut out of the lending markets and typically went bankrupt – although their technologies survived.

The first reflex after the Lehman crash in 2008 was to lavish stimulus on the old incumbents and the car industry because that was the easiest way to stop the downward economic spiral. Europe’s carbon emissions contracts collapsed and ceased to be a relevant price signal for a decade. 

Climate activists fear the worst again, and this time the world has no margin for error. They need not fear.

The balance of advantage now lies with the greens. The market has switched sides. Big Money is no longer aligned with Big Oil. It would take active political intervention and subsidies in favour of the fossil industry to prop up the old edifice at this juncture.

Read the full story here.

AEP does not get off to a very auspicious start, when he confuses “energy” with “electricity”.

Needless to say, his chart should say”electricity”. In terms of total energy, wind and solar only account for a tiny 3.5%.

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He then goes on to repeat his claims that wind and solar are now the cheapest source of new build power, somehow ignoring the fact that when subsidies were withdrawn in the UK new build wind and solar dried up to near zero.

More fundamentally though, he fails to understand that to make a true comparison you need to allow for the indirect costs of renewables – the cost of standby capacity, transmission costs, grid balancing etc.

Showing a complete lack of expertise in the area of power supply, he tries to compare the cost of wind/solar with OCGT:

How is natural gas going to compete with this renewable onslaught? The LCOE of open-cycle gas turbines is today around $99 in the US

But OCGTs are designed as small scale peakers, not for baseload, which is where CCGTs come in.

He then compounds his lack of knowledge by claiming that batteries can solve the problem of intermittency:

With a delay we are seeing the same trajectory for battery storage. BNEF says levelized costs have halved over the last two years. They have dropped to $115 Mw/H in China. Energy storage will be so cheap by the mid-2020s that the "intermittency" problem will wither away.

Perhaps somebody should tell him that battery storage simply does not have the capacity to supply power for the days and weeks needed when wind and solar are not running at the required rates. That is why the role of batteries is limited to short term grid balancing, usually for minutes or at most an hour or so.

He then moves on to electric cars, which he assures us will be the future, even though they are pretty much useless for most of the population, and pose challenges for the Grid for which there are currently no answers.

It is true of course that the move to EVs is being driven by governments and not for economic reasons. Such an obsession though will lead to an extremely dangerous reliance on China for battery supplies and materials. Given recent experiences, pursuing such a strategy would be short sighted to say the least. In the meantime, car manufacturers in Europe are close to going under as their traditional markets are taken away.

His whole argument is really based around the Paris Agreement:

The Paris accord has shifted global politics irreversibly. So has last year’s report by the Intergovernmental Panel on Climate Change warning that the CO2 risk thresholds are even lower than we feared and that we have just a decade to head off cataclysmic tipping points.

Whatever we think about the IPCC, the harsh political reality is that absolutely nothing has changed since Paris, as far as real politik is concerned. China, India and the rest of the developing world have no interest in ditching their fossil fuel powered economies.

The EU can huff and puff, but it is increasingly becoming an irrelevance on the global scene.

Which brings us on to the German industry federation, the BDI. AEP writes:

The German industry federation (BDI) is mischievously trying to do exactly that. It never liked Europe’s Green Deal. It is now exploiting the fear and economic confusion of Covid-19 to try to finish off the whole venture.

The BDI claims that the wrenching adjustments needed to comply with cuts of 50pc to 55pc in greenhouse emissions by 2030 (compared to 1990) are unachievable and must be reviewed urgently in light of “changed economic circumstances”.

A supporting chorus of politicians from Angela Merkel’s Christian Democrats – the brown bloc – warn that the Green Deal is “simply not financially plausible” any longer and risks the deindustrialisation of Germany. They want an overhaul of all environmental legislation.

Whether they win their battle or not does not alter the harsh economic realities which they understand far better than AEP. With the damage from CV already mounting up, blind pursuit of the green agenda really does risk deindustrialisation, and not just in Germany.

AEP repeats Ursula van der Leyen’s economically illiterate assertion that the green deal is the motor for recovery. I’m not sure I would rely on Ursula, given her track record.

But this recession, like every other in recent decades, will be see a recovery based on cheap and readily available supplies of fossil fuels.

AEP’s proposals will make matters much worse, as they rely on government picking winners, a recipe for disaster.

Above all they will lead to massive dislocation of economies, with some sectors and jobs allowed to go to the wall.

The bottom line is that wind and solar power only supply 3% of the world’s energy, and there is no evidence that modern economies can operate with a high penetration of renewable energy.

There is not a cat in hell’s chance that this will alter significantly in the foreseeable future.

26 Comments
  1. April 30, 2020 3:25 pm

    “The first reflex after the Lehman crash in 2008 was to lavish stimulus on the old incumbents and the car industry because that was the easiest way to stop the downward economic spiral.”

    But that is not what “stopped the downward trend” and not what brought the economy out of the 2008 financial crash. It was rescinding the mark-to-market rule that did it.
    https://tambonthongchai.com/2020/02/21/brianwesbury/

    There is nothing in this crash and recovery that can be used to sell the green agenda. Also there is nothing in the covid-19 crash and its expected recovery that can be used to sell a green agenda and these people trying to do so will surely emerge as foolish activists driven by activism and not by real or meaningful analysis.
    https://tambonthongchai.com/2020/04/29/numnut-un-bureaucrat/

    • MrGrimNasty permalink
      April 30, 2020 3:54 pm

      Past experience shows the green zealots can twist/spin just about anything to explain/justify whatever they want, and the majority of the MSM will reinforce it.

      Truth/logic doesn’t seem to be a factor anymore.

      • May 1, 2020 10:40 am

        Anyone who has done the forecasts and the analysis and has determined that this is a growth industry should invest in it and form a joint stock corporation and issue shares to all who believe likewise. If they are not doing that and just lecturing from the easy chair, the idea is not credible so much so that the lecturer himself is unwilling to invest.

    • Broadlands permalink
      April 30, 2020 3:55 pm

      There is something starkly evident in the covid-19 crash that should tell these foolish activists clearly they are seriously mistaken to try and continue their unrelenting ‘green’ demand to lower CO2 emissions to zero, Net-zero. After the pandemic is contained, except for the damage to global health, the result of lowering CO2 emissions in transportation alone would be no different. The social and economic devastation would continue and would likely be even worse. They cannot expect a different result. Even the atmosphere would show no reduction and will continue to rise. The use of carbon fuels cannot be stopped instantly.

    • Phoenix44 permalink
      May 1, 2020 8:30 am

      That’s total garbage. Marking to market can only be a problem if the market has fallen. The market fell for very good reasons in the financial crisis – lots of assets, both physical (houses) and financial (derivatives often of house prices) were wildly overvalued as a result of subprime lending. When a house worth $10,000 has a mortgage of $100,000 you have a problem.

  2. MrGrimNasty permalink
    April 30, 2020 3:50 pm

    UN chief has already said non-green companies should be discriminated against.

    https://www.thegwpf.com/un-chief-only-green-companies-should-be-saved/

    Remember the economic damage of CV19 is entirely self-inflicted, you have to wonder why world leaders have been so keen to take this insanely disproportionate action…… after closing China’s borders in the first place was entirely disproportionate/unnecessary.

    Enough people have warned/predicted that a virus scare would be used as the pretext for a (probably authoritarian socialist) revolution in global economics and governance.

  3. NeilC permalink
    April 30, 2020 4:40 pm

    Surely, if the green activists really wanted to be green, they would want more CO2, to green the planet. It has already increased greening by 14%, due to natural increase, and a very small increase, of human emmissions of CO2.

  4. Curious George permalink
    April 30, 2020 5:00 pm

    His father was Professor of Social Anthropology at Oxford University. It shows.

  5. jack broughton permalink
    April 30, 2020 5:52 pm

    The objective of these articles is to brainwash not to inform. By repeating the mantra that green energy is cheap and disaster looms if you do not do what we say, they have convinced people that they are saving us all from the nasty “deniers” and oil tycoons.

    An interesting point is that it is not just the developing world who are ignoring the Paris agreement: there is Japan and of course the USA, which has so much gas that it does not need coal internally any more but is exporting it merrily. The UK is leading the lemmings.

  6. Rowland P permalink
    April 30, 2020 7:16 pm

    Surely this is the Protocols of the Elders of Zion finally emerging with the destruction of the GOYIM!

    • martinbrumby permalink
      May 1, 2020 9:31 am

      Absolute bollocks.
      I hope that you are attempting humour.
      There is nothing funny about antisemitism.
      If you believe in the “protocols” then you are brain dead. Piss off and don’t come back.

      • Coeur de Lion permalink
        May 1, 2020 2:10 pm

        I think Rowland is jesting. But the Protocols are an interesting read. I had to do an essay on them at So’ton Uni.

  7. manicbeancounter permalink
    April 30, 2020 8:07 pm

    The Paris Agreement has not shifted global politics irreversibly, unless it is to shift the balance of power and from rational policies to nonsense. Article 4.1 specifically excludes developing countries from any obligation to reduce their emissions. This essentially unchanged from the United Nations Framework Convention on Climate Change Treaty that came into force in March 1994.
    With >80% of the global population, >60% of global emissions & about 100% of the net emissions increase since 1990, excluding developing makes even maintaining emissions at current levels.
    I will do the policy maths. The UNEP Emissions Gap Report 2018 stated in the Summary

    2. Global greenhouse gas emissions show no signs of peaking. …. Total annual greenhouse gases emissions, including from land-use change, reached a record high of 53.5 GtCO2e in 2017, an increase of 0.7 GtCO2e compared with 2016. In contrast, global GHG emissions in 2030 need to be approximately 25 percent and 55 percent lower than in 2017 to put the world on a least-cost pathway to limiting global warming to 2°C and 1.5°C respectively.

    Lets make the policy maths very simple. Assume in 2017 the figure is 55 GtCO2e. Developing countries account for 35, rising to 40 in 2030.
    To globally achieve the 2C target the “developed” countries must collectively achieve a 95% emissions reduction. This is consistent with Extinction Rebellion wanting a 100% reduction by 2030. They just omit to say that to avoid serious climate catastrophe by 2030 all “developing” countries must be rapidly reducing their emissions to zero. But following the policy argument to its logical conclusion is not an ability possessed by climate alarmists, whether extreme or moderate.

    https://manicbeancounter.com/tag/unep-emissions-gap-report-2018/

  8. Jackington permalink
    April 30, 2020 8:30 pm

    On the whole I prefer Michael Moore’s version of events shown in Planet of the Humans.

    • April 30, 2020 9:34 pm

      The main point of which for me being the horrific environmental degradation of biomass.

  9. manicbeancounter permalink
    April 30, 2020 8:41 pm

    Economically the lockdown has generated a supply-side recession. As a result global oil prices have collapsed, with the futures price for West Texas Intermediate going negative for a few hours last week. Many of the independent shale oil producers in the USA are likely to go bust as a result, and their assets will be available for a fraction of the original cost. As a result break-even production levels will be reduced. With oil-dependent countries (esp Russia, Iran, Saudi Arabia) desparate for revenue, oil prices are likely to remain low for a number of years. So why switch to renewables?

    • John Cullen permalink
      April 30, 2020 10:00 pm

      Because in, for example, the UK the Climate Change Act (2008) and prime minister May’s swan song embedded the switch to renewables/net-zero into legislation. That legislation still exists and hence will drive policy … however economically destructive and otherwise insane that policy may be.

      Many EU and ex-EU countries will not be happy places to experience the recovery from the Covid-19 depression while that green legislation hampers those recoveries.

      Regards,
      John.

  10. May 1, 2020 1:59 am

    my next car may be a plugin hybrid, which is not useless. I can do 90% of my driving on electricity. EVs work great with nuclear power plants, we have one where I live. They provide a natural, distributed storage solution for the excess load at night that, today, goes into a resistor.

    • Phoenix44 permalink
      May 1, 2020 8:32 am

      When lots of people have EVs there won’t be excess load at night. There will be excess demand.

    • May 1, 2020 9:48 am

      Trouble is hybrids will be banned as well

  11. May 1, 2020 6:53 am

    It will be immoral and impractical to limit CO2 emissions from the developing world.

    https://edmhdotme.wordpress.com/speculating-about-future-global-co2-emissions-quantifying-futility/

  12. Phoenix44 permalink
    May 1, 2020 8:37 am

    In the end, politicians like getting reelected. Nobody will be getting reelected with 15% unemployment or more, nor with swinging tax increases and price increases. I suspect (hope) a bunch of politicians are going to discover that Greenery is a luxury – you can only afford it the good times.

    I can’t see even largely useless Boris throwing away the Tory gains in the North by pursuing expensive Green dreams for a few years. But you never know.

  13. martinbrumby permalink
    May 1, 2020 9:37 am

    AEP, like Michael Moore, is as thick as three bog seats screwed together.

    But at least Moore has realised that ruinable energy is a dangerous, useless scam.

    Perhaps AEP should watch “Planet of the Humans”.

    • Gerry, England permalink
      May 1, 2020 10:44 am

      I think it was more Jeff Gibbs driving Planet of the Humans than Moore from reading some of his comments on making the film. He is another leftie like Moore who was disturbed by what he saw being done to ‘save’ the environment.

  14. Gerry, England permalink
    May 1, 2020 10:48 am

    WUWT has an excellent piece today titled ‘Australian energy security on the brink’ that the moron AEP would be advised to read – but never will – looking at how will the grid cope with the next coal power station closure in 2023. The problem is fairly simple, how will wind power fill the gap when looking back at the wind data in April alone there would have been 3 grid failures.

  15. May 2, 2020 9:19 am

    Move over Michael Moore, here comes Emma…

    Spiked: Why I’ve had enough of eco-luvvies
    Emma Thompson’s Extinction Rebellion film reveals her delusions of radicalism.
    https://www.spiked-online.com/2020/05/01/why-ive-had-enough-of-eco-luvvies/

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