Recently Bill Gates explained in an interview with the Financial Times why current renewables are dead-end technologies. They are unreliable. Battery storage is inadequate. Wind and solar output depends on the weather. The cost of decarbonization using today’s technology is “beyond astronomical,” Mr. Gates concluded.
Google engineers came to a similar conclusion last year. After seven years of investigation, they found no way to get the cost of renewables competitive with coal. “Unfortunately,” the engineers reported, “most of today’s clean generation sources can’t provide power that is both distributed and dispatchable”—that is, electricity that can be ramped up and down quickly. “Solar panels, for example, can be put on every rooftop, but can’t provide power if the sun isn’t shining.”
If Mr. Obama gets his way, the U.S. will go down the rocky road traveled by the European Union. In 2007 the EU adopted the target of deriving 20% of its energy consumption from renewables by 2020. Europe is therefore around a decade ahead of the U.S. in meeting a more challenging target—the EU’s 20% is of total energy, not just electricity. To see what the U.S. might look like, Europe is a good place to start.
Germany passed its first renewable law in 1991 and already has spent $440 billion (€400 billion) on its so-called Energy Transition. The German environment minister has estimated a cost of up to $1.1 trillion (€1 trillion) by the end of the 2030s. With an economy nearly five times as large as Germany’s and generating nearly seven times the amount of electricity (but a less demanding renewables target), this suggests the cost of meeting Mr. Obama’s pledge is of the order of $2 trillion.
There are other, indirect costs to consider. Germany is the world’s second largest exporter of merchandise, behind China and ahead of the U.S. But high and rising energy costs are driving German companies to locate new capacity overseas.
Most damaging is the effect of renewable mandates on the power stations necessary to ensure the stability of the electric grid and balance supply and demand. Even a modest proportion of wind- and solar-generated electricity prevents gas- and coal-powered stations from recovering their fixed costs. This has led to the proposed shuttering of Irsching in Bavaria, one of Germany’s newest and most efficient gas-fired plants. So unless conventional capacity also is subsidized, at some point the lights will start going out. European politicians have no answer to a problem they created, and it’s a safe bet the EPA doesn’t either.
One unintended consequence of the fracking boom is the displacement of coal by natural gas—a cheaper and more effective way to cut carbon-dioxide emissions. A 2014 Brookings Institution study estimated that replacing coal with modern combined-cycle gas turbines cuts 2.6 times more carbon-dioxide emissions than using wind does, and cuts four times as many emissions as solar.
Mr. Darwall summarizes that Mr. Obama's renewable target does not produce jobs, growth, or prosperity. Read more here.
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