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The spin doctors of renewable energy are in overdrive. On June 11 the renewable energy establishment jointly released the UN’s annual report on financial investment in the sector (Global Energy Investment 2012) and the annual report by REN21 (Renewable Energy Policy Network for the 21st Century, a UN spinoff) which focuses on the end uses of renewable energy — how much is being used in what sectors of the economy. The double release was timed nine days prior to the UN’s coming summit on “sustainable development” entitled Rio + 20 [it’s been years since the last Rio environmental gabfest]. It is designed to push the summit–with an expected attendance of 50,000, from heads of states to run of the mill activists– to enact yet more subsidies for renewables in pursuit of the holy grail: a “green” economy.
No one expects the media or delegates to read lengthy reports. In this case a single summary report of both reports has been issued, so that it is not even necessary to read two summaries. As in the case of the UN’s International Panel on Climate Change reports, the summary is more tendentious and politically loaded than the reports on which it is based. But given that the summary is what is widely read and quoted–certainly it’s all the Rio delegates are likely to read–it carries the greatest weight. And it has a dual message. On the one hand the renewables sector is moving forward splendidly. Investment in solar has now outstripped that in wind and overall investment in renewables in 2011 grew 17% over 2010 despite the miserable economy. End uses have also grown strongly, to the point where renewables now supply 16.7% of total global energy consumption. On the other hand, there are headwinds. Those lower costs create pain on the supply side, sinking some major companies. Bottom line: the summary report quotes Achim Steiner, Executive Director of the UN Environmental Programme: “This sends yet another strong signal of opportunity to world leaders and delegates meeting later this month…It is essential to continue government policies that support and nurture the sector’s growth…Otherwise the low-carbon transition could weaken just at the point when exciting cost reductions are starting to transform the economics.” A not so veiled threat here to the assemblage at Rio. Keep the subsidies coming or the green economy could collapse and it will be your fault.
The summary report obfuscates the underlying reality. Take that 16.7% of global energy consumption provided by renewables. By focusing heavily on the great percentage jump in solar and wind capacity, the report leaves the impression that these technologies provide a significant segment of that 16.7%. But while you could tease it out of the diagrams in the full length REN21 report, you’d never guess from the summary report that sun and wind together provide a lot less than 1% of that energy (or even of electricity, a much narrower measure).
And what of costs? The summary report slips and slides on that topic. We are told that gross investment in fossil fuel capacity in 2011 was $302 billion with renewables (excluding large hydro, which greens don’t like) moving closer at $237 billion. But there’s no mention of how much energy the public gets relative to the two investments. There’s a lot of talk of adding “capacity” but capacity is deceptive when it comes to wind and solar. Because the wind doesn’t blow all the time and the sun doesn’t shine, capacity is much higher than the actual energy generated. For the same reason you need backup facilities using dependable coal or gas. These should be included in figuring the cost of renewables (but generally aren’t). For example, Britain has concluded it will have to construct an additional 17 natural gas plants as backup for its new wind turbines, at a cost of ten billion pounds.
The summary report says costs are coming down to the point where, in a few years, wind and solar will be competitive with fossil fuels. Let’s take wind first. The report says the costs of generating onshore wind fell 9% in 2011. Onshore. There’s the rub. If we are going to project into the future, the growing public clamor against onshore wind turbines, especially in Europe, has to be taken into account. They are widely viewed as blots on the landscape (a state of the art turbine is taller than the Washington Monument), a health hazard to those living in close proximity, a detriment to real estate values, and a blow to tourism. Talk about growth: The European Platform Against Windfarms, founded in 2008 by groups from four EU countries, now has 532 member organizations from 23 countries. Even Denmark, whose new government has grandiosely proposed completely phasing out fossil fuels by 2050 (Germany is not far behind with an 80% mandate for renewables by 2050) has bowed to public detestation of turbines, promising most will be built offshore. But offshore turbines, according to the Energy Information Administration (EIA)of the U.S. Department of Energy, are three times more expensive. And, once they are buffeted by storms and tides, no one knows how expensive they may be to maintain.
As for solar, while it’s true the price of photo voltaic cells has dropped dramatically, that’s only part of the cost of solar power generation. The EIA estimates that in 2016 the cost of new solar generation will still be three times the cost of new natural gas facilities. That’s in the United States, but the relative costs elsewhere are not likely to be radically different.
Seeking to minimize the importance of the high profile failures in the renewables sector, the summary report offers a specious comparison to the auto industry. “In 1903, the United States had over 500 car companies, most of which quickly fell by the wayside even as the automobile sector grew into an industrial juggernaut….Today, the renewable energy sector is experiencing similar growing pains as the sector consolidates.” But those 500 companies did not depend on the public dole to survive. The winners provided cars whose market price the public was willing to pay, because of cost, performance, style, reliability, quality of construction or a combination of such factors.
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