Rethinking Renewable Mandates

Powering the world’s economy with wind, water and solar, and perhaps a little wood sounds like a good idea until a person looks at the details. The economy can use small amounts of wind, water and solar, but adding these types of energy in large quantities is not necessarily beneficial to the system.

While a change to renewables may, in theory, help save world ecosystems, it will also tend to make the electric grid increasingly unstable. To prevent grid failure, electrical systems will need to pay substantial subsidies to fossil fuel and nuclear electricity providers that can offer backup generation when intermittent generation is not available. Modelers have tended to overlook these difficulties. As a result, the models they provide offer an unrealistically favorable view of the benefit (energy payback) of wind and solar.

If the approach of mandating wind, water, and solar were carried far enough, it might have the unfortunate effect of saving the world’s ecosystem by wiping out most of the people living within the ecosystem. It is almost certain that this was not the intended impact when legislators initially passed the mandates.

[1] History suggests that in the past, wind and water never provided a very large percentage of total energy supply.

Figure 1. Annual energy consumption per person (megajoules) in England and Wales 1561-70 to 1850-9 and in Italy 1861-70. Figure by Tony Wrigley, Cambridge University.

Figure 1 shows that before and during the Industrial Revolution, wind and water energy provided 1% to 3% of total energy consumption.

For an energy source to work well, it needs to be able to produce an adequate “return” for the effort that is put into gathering it and putting it to use. Wind and water seemed to produce an adequate return for a few specialized tasks that could be done intermittently and that didn’t require heat energy.

When I visited Holland a few years ago, I saw windmills from the 17th and 18th centuries. These windmills pumped water out of low areas in Holland, when needed. A family would live inside each windmill. The family would regulate the level of pumping desired by adding or removing cloths over the blades of the windmill. To earn much of their income, they would also till a nearby plot of land.

This overall arrangement seems to have provided adequate income for the family. We might conclude, from the inability of wind and water energy to spread farther than 1% -3% of total energy consumption, that the energy return from the windmills was not very high. It was adequate for the arrangement I described, but it didn’t provide enough extra energy to encourage greatly expanded use of the devices.

[2] At the time of the Industrial Revolution, coal worked vastly better for most tasks of the economy than did wind or water.

Economic historian Tony Wrigley, in his book Energy and the English Industrial Revolution, discusses the differences between an organic economy (one whose energy sources are human labor, energy from draft animals such as oxen and horses, and wind and water energy) and an energy-rich economy (one that also has the benefit of coal and perhaps other energy sources). Wrigley notes the following benefits of a coal-based energy-rich economy during the period shown in Figure 1:

  • Deforestation could be reduced. Before coal was added, there was huge demand for wood for heating homes and businesses, cooking food, and for making charcoal, with which metals could be smelted. When coal became available, it was inexpensive enough that it reduced the use of wood, benefiting the environment.
  • The quantity of metals and tools was greatly increased using coal. As long as the source of heat for making metals was charcoal from trees, the total quantity of metals that could be produced was capped at a very low level.
  • Roads to mines were greatly improved, to accommodate coal movement. These better roads benefitted the rest of the economy as well.
  • Farming became a much more productive endeavor. The crop yield from cereal crops, net of the amount fed to draft animals, nearly tripled between 1600 and 1800.
  • The Malthusian limit on population could be avoided. England’s population grew from 4.2 million to 16.7 million between 1600 and 1850. Without the addition of coal to make the economy energy-rich, the population would have been capped by the low food output from the organic economy.

[3] Today’s wind, water, and solar are not part of what Wrigley called the organic economy. Instead, they are utterly dependent on the fossil fuel system.

The name renewables reflects the fact that wind turbines, solar panels, and hydroelectric dams do not burn fossil fuels in their capture of energy from the environment.

Modern hydroelectric dams are constructed with concrete and steel. They are built and repaired using fossil fuels. Wind turbines and solar panels use somewhat different materials, but these too are available only thanks to the use of fossil fuels. If we have difficulty with the fossil fuel system, we will not be able to maintain and repair any of these devices or the electricity transmission system used for distributing the energy that they capture.

[4] With the 7.7 billion people in the world today, adequate energy supplies are an absolute requirement if we do not want population to fall to a very low level. 

There is a myth that the world can get along without fossil fuels. Wrigley writes that in a purely organic economy, the vast majority of roads were deeply rutted dirt roads that could not be traversed by wheeled vehicles. This made overland transport very difficult. Canals were used to provide water transport at that time, but we have virtually no canals available today that would serve the same purpose.

It is true that buildings for homes and businesses can be built with wood, but such buildings tend to burn down frequently. Buildings of stone or brick can also be used. But with only the use of human and animal labor, and having few roads that would accommodate wheeled carts, brick or stone homes tend to be very labor-intensive. So, except for the very wealthy, most homes will be made of wood or of other locally available materials such as sod.

Wrigley’s analysis shows that before coal was added to the economy, human labor productivity was very low. If, today, we were to try to operate the world economy using only human labor, draft animals, and wind and water energy, we likely could not grow food for very many people. World population in 1650 was only about 550 million, or about 7% of today’s population. It would not be possible to provide for the basic needs of today’s population with an organic economy as described by Wrigley.

(Note that organic here has a different meaning than in “organic agriculture.” Today’s organic agriculture is also powered by fossil fuel energy. Organic agriculture brings soil amendments by truck, irrigates land and makes “organic sprays” for fruit, all using fossil fuels.)

[5] Wind, water and solar only provided about 11% of the world’s total energy consumption for the year 2018. Trying to ramp up the 11% production to come anywhere close to 100% of total energy consumption seems like an impossible task.

Figure 2. World Energy Consumption by Fuel, based on data of 2019 BP Statistical Review of World Energy.

Let’s look at what it would take to ramp up the current renewables percentage from 11% to 100%. The average growth rate over the past five years of the combined group that might be considered renewable (Hydro + Biomass etc + Wind&Solar) has been 5.8%. Maintaining such a high growth rate in the future is likely to be difficult because new locations for hydroelectric dams are hard to find and because biomass supply is limited. Let’s suppose that despite these difficulties, this 5.8% growth rate can be maintained going forward.

To increase the quantity from 2018’s low level of renewable supply to the 2018 total energy supply at a 5.8% growth rate would take 39 years. If population grows between 2018 and 2057, even more energy supply would likely be required. Based on this analysis, increasing the use of renewables from a 11% base to close to a 100% level does not look like an approach that has any reasonable chance of fixing our energy problems in a timeframe shorter than “generations.”

The situation is not quite as bad if we look at the task of producing an amount of electricity equal to the world’s current total electricity generation with renewables (Hydro + Biomass etc + Wind&Solar); renewables in this case provided 26% of the world’s electricity supply in 2018.

Figure 3. World electricity production by type, based on data from 2019 BP Statistical Review of World Energy.

The catch with replacing electricity (Figure 3) but not energy supplies is the fact that electricity is only a portion of the world’s energy supply. Different calculations give different percentages, with electricity varying between 19% and 43% of total energy consumption.1 Either way, substituting wind, water and solar in electricity production alone does not seem to be sufficient to make the desired reduction in carbon emissions.

[6] A major drawback of wind and solar energy is its variability from hour-to-hour, day-to-day, and season-to-season. Water energy has season-to-season variability as well, with spring or wet seasons providing the most electricity.

Back when modelers first looked at the variability of electricity produced by wind, solar and water, they hoped that as an increasing quantity of these electricity sources were added, the variability would tend to offset. This happens a little, but not nearly as much as one would like. Instead, the variability becomes an increasing problem as more is added to the electric grid.

When an area first adds a small percentage of wind and/or solar electricity to the electric grid (perhaps 10%), the electrical system’s usual operating reserves are able to handle the variability. These were put in place to handle small fluctuations in supply or demand, such as a major coal plant needing to be taken off line for repairs, or a major industrial client reducing its demand.

But once the quantity of wind and/or solar increases materially, different strategies are needed. At times, production of wind and/or solar may need to be curtailed, to prevent overburdening the electric grid. Batteries are likely to be needed to help ease the abrupt transition that occurs when the sun goes down at the end of the day while electricity demand is still high. These same batteries can also help ease abrupt transitions in wind supply during wind storms.

Apart from brief intermittencies, there is an even more serious problem with seasonal fluctuations in supply that do not match up with seasonal fluctuations in demand. For example, in winter, electricity from solar panels is likely to be low. This may not be a problem in a warm country, but if a country is cold and using electricity for heat, it could be a major issue.

The only real way of handling seasonal intermittencies is by having fossil fuel or nuclear plants available for backup. (Battery backup does not seem to be feasible for such huge quantities for such long periods.) These back-up plants cannot sit idle all year to provide these services. They need trained staff who are willing and able to work all year. Unfortunately, the pricing system does not provide enough funds to adequately compensate these backup systems for those times when their services are not specifically required by the grid. Somehow, they need to be paid for the service of standing by, to offset the inevitable seasonal variability of wind, solar and water.

[7] The pricing system for electricity tends to produce rates that are too low for those electricity providers offering backup services to the electric grid.

As a little background, the economy is a self-organizing system that operates through the laws of physics. Under normal conditions (without mandates or subsidies) it sends signals through prices and profitability regarding which types of energy supply will “work” in the economy and which kinds will simply produce too much distortion or create problems for the system.

If legislators mandate that intermittent wind and solar will be allowed to “go first,” this mandate is by itself a substantial subsidy. Allowing wind and solar to go first tends to send prices too low for other producers because it tends to reduce prices below what those producers with high fixed costs require.2

If energy officials decide to add wind and solar to the electric grid when the grid does not really need these supplies, this action will also tend to push other suppliers off the grid through low rates. Nuclear power plants, which have already been built and are adding zero CO2 to the atmosphere, are particularly at risk because of the low rates. The Ohio legislature recently passed a $1.1 billion bailout for two nuclear power plants because of this issue.

If a mandate produces a market distortion, it is quite possible (in fact, likely) that the distortion will get worse and worse, as more wind and solar is added to the grid. With more mandated (inefficient) electricity, customers will find themselves needing to subsidize essentially all electricity providers if they want to continue to have electricity.

The physics-based economic system without mandates and subsidies provides incentives to efficient electricity providers and disincentives to inefficient electricity suppliers. But once legislators start tinkering with the system, they are likely to find a system dominated by very inefficient production. As the costs of handling intermittency explode and the pricing system gets increasingly distorted, customers are likely to become more and more unhappy.

[8] Modelers of how the system might work did not understand how a system with significant wind and solar would work. Instead, they modeled the most benign initial situation, in which the operating reserves would handle variability, and curtailment of supply would not be an issue. 

Various modelers attempted to figure out whether the return from wind and solar would be adequate, to justify all of the costs of supporting it. Their models were very simple: Energy Out compared to Energy In, over the lifetime of a device. Or, they would calculate Energy Payback Periods. But the situation they modeled did not correspond well to the real world. They tended to model a situation that was close to the best possible situation, one in which variability, batteries and backup electricity providers were not considerations. Thus, these models tended to give a far too optimistic estimates of the expected benefit of intermittent wind and solar devices.

Furthermore, another type of model, the Levelized Cost of Electricity model, also provides distorted results because it does not consider the subsidies needed for backup providers if the system is to work. The modelers likely also leave out the need for backup batteries.

In the engineering world, I am told that computer models of expected costs and income are not considered to be nearly enough. Real-world tests of proposed new designs are first tested on a small scale and then at progressively larger scales, to see whether they will work in practice. The idea of pushing “renewables” sounded so good that no one thought about the idea of testing the plan before it was put into practice.

Unfortunately, the real-world tests that Germany and other countries have tried have shown that intermittent renewables are a very expensive way to produce electricity when all costs are considered. Neighboring countries become unhappy when excess electricity is simply dumped on the grid. Total CO2 emissions don’t necessarily go down either.

[9] Long distance transmission lines are part of the problem, not part of the solution. 

Early models suggested that long-distance transmission lines might be used to smooth out variability, but this has not worked well in practice. This happens partly because wind conditions tend to be similar over wide areas, and partly because a broad East-West mixture is needed to even-out the rapid ramp-down problem in the evening, when families are still cooking dinner and the sun goes down.

Also, long distance transmission lines tend to take many years to permit and install, partly because many landowners do not want them crossing their property. In some cases, the lines need to be buried underground. Reports indicate that an underground 230 kV line costs 10 to 15 times what a comparable overhead line costs. The life expectancy of underground cables seems to be shorter, as well.

Once long-distance transmission lines are in place, maintenance is very fossil fuel dependent. If storms are in the area, repairs are often needed. If roads are not available in the area, helicopters may need to be used to help make the repairs.

An issue that most people are not aware of is the fact that above ground long-distance transmission lines often cause fires, especially when they pass through hot, dry areas. The Northern California utility PG&E filed for bankruptcy because of fires caused by its transmission lines. Furthermore, at least one of Venezuela’s major outages seems to have been related to sparks from transmission lines from its largest hydroelectric plant causing fires. These fire costs should also be part of any analysis of whether a transition to renewables makes sense, in terms of either cost or energy returns.

[10] If wind turbines and solar panels are truly providing a major net benefit to the economy, they should not need subsidies, even the subsidy of going first.

To make wind and solar electricity producers able to compete with other electricity providers without the subsidy of going first, these providers need a substantial amount of battery backup. For example, wind turbines and solar panels might be required to provide enough backup batteries (perhaps 8 to 12 hours’ worth) so that they can compete with other grid members, without the subsidy of going first. If it really makes sense to use such intermittent energy, these providers should be able to still make a profit even with battery usage. They should also be able to pay taxes on the income they receive, to pay for the government services that they are receiving and hopefully pay some extra taxes to help out the rest of the system.

In Item [2] above, I mentioned that when coal mines were added in England, roads to the mines were substantially improved, befitting the economy as a whole. A true source of energy (one whose investment cost is not too high relative to its output) is supposed to be generating “surplus energy” that assists the economy as a whole. We can observe an impact of this type in the improved roads that benefited England’s economy as a whole. Any so-called energy provider that cannot even pay its own fair share of taxes acts more like a leech, sucking energy and resources from others, than a provider of surplus energy to the rest of the economy.


In my opinion, it is time to eliminate renewable energy mandates. There will be some instances where renewable energy will make sense, but this will be obvious to everyone involved. For example, an island with its electricity generation from oil may want to use some wind or solar generation to try to reduce its total costs. This cost saving occurs because of the high price of oil as fuel to make electricity.

Regulators, in locations where substantial wind and/or solar has already been installed, need to be aware of the likely need to provide subsidies to backup providers, in order to keep the electrical system operating. Otherwise, the grid will likely fail from lack of adequate backup electricity supply.

Intermittent electricity, because of its tendency to drive other providers to bankruptcy, will tend to make the grid fail more quickly than it would otherwise. The big danger ahead seems to be bankruptcy of electricity providers and of fossil fuel producers, rather than running out of a fuel such as oil or natural gas. For this reason, I see little reason for the belief by many that electricity will “last longer” than oil. It is a question of which group is most affected by bankruptcies first.

I do not see any real reason to use subsidies to encourage the use of electric cars. The problem we have today with oil prices is that they are too low for oil producers. If we want to keep oil production from collapsing, we need to keep oil demand up. We do this by encouraging the production of cars that are as inexpensive as possible. Generally, this will mean producing cars that operate using petroleum products.

(I recognize that my view is the opposite one from what many Peak Oilers have. But I see the limit ahead as being one of too low prices for producers, rather than too high prices for consumers. The CO2 issue tends to disappear as parts of the system collapse.)


[1] BP bases its count on the equivalent fossil fuel energy needed to create the electricity; IEA counts the heat energy of the resulting electrical output. Using BP’s way of counting electricity, electricity worldwide amounts to 43% of total energy consumption. Using the International Energy Agency’s approach to counting electricity, electricity worldwide amounts to only about 19% of world energy consumption.

[2] In some locations, “utility pricing” is used. In these cases, pricing is set in a way needed to provide a fair return to all providers. With utility pricing, intermittent renewables would not be expected to cause low prices for backup producers.

This entry was posted in Energy policy and tagged , , , , by Gail Tverberg. Bookmark the permalink.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.

1,461 thoughts on “Rethinking Renewable Mandates

  1. “Global motor vehicle output declined last year by 1%, the first annual decrease since 2009 and only the third fall in 20 years, according to data from the International Organization of Motor Vehicle Manufacturers (OICA). But output is on course to drop much faster in 2019…

    “Motor manufacturing is one largest and most networked of all global value chains, making it central to the global economy.”

  2. “[Australian] wages are stagnant. Wealth is falling. House prices are down. Consumers aren’t spending. Businesses aren’t investing. Interest rates are at record lows and may be heading for zero. The federal government and Reserve Bank seem locked in an arm wrestle over whether fiscal or monetary policy should be used to generate more stimulus.”

      • Not good for Australians or the world economy

        I can fully appreciate where these articles are coming from. I’ve read this & one or 2 other blogs for many years & told people to expect a slow down but never thought it would hit this fast.

        I work in new cars (Pre-Delivery section) where we prepare & send new cars to our dealerships for delivery to the customers & we are DEAD…..I’m spending the weeks lately googling everything from finance to waterbears it’s that slow.

        Although the motor trade has always been cyclical I’ve never seen it this quiet & I really don’t know if it will ever pick up.
        I know this is only anecdotal but it certainly ties in with the above comments & articles Harry’s just posted.

          • That must be horribly unnerving, Brendon. I hope the wolf is still a long way from your door.

            • Thanks Harry, I appreciate that. I’m relatively lucky in that I have some land I own outright up north & no debts plus I live on next to nothing.
              I weaved my life into this position because of blogs such as OFW, realizing that this culture based on mass consumption & debt wasn’t going to last forever…………….

        • Besides the housing industry, what industries in Australia in particular are doing badly? Why are new car sales down so much?

          How much of the problem is China related? (not buying houses, not visiting, not buying imports)

    • Houses have intrinsic value because you can live in them. And falling houses are good news, because they represent a transfer of real wealth from those who own them to those now able to buy them; that is, from richer to poorer. And also from older to younger, another positive move.

      But since most modern economists believe that prices should always rise, because the rich should do what they will, while the wage slaves endure what they must, they see this as bad news. The classical economists, from Adam Smith to Samuel Smiles, knew better.

      • And with negative interest on house loans the owners who chose to see their houses falling in value don’t have to carry the full burden .

          • Depends on how the loans are set up, how long until next job, and at what salary.

            Otherwise its up to the banks to tempt someone to buy the house, maintain it while still expecting the value to fall.

      • I don’t think falling house prices really work. For one thing, new buyers quickly disappear (except perhaps for commercial buyers, who can rent them out). Why buy something that will decline in value? Renting, and changing places to a new place (even different house for rent) seems like a better option. Let someone else take the falling value.

        If buyers do appear, the banks take the loans (perhaps from a commercial buyers of houses), package them up, and sell them as part of packages to pensions and others. Then the pensions get to deal with the fallout from falling values. Privatize the gains, socialize the losses.

        • Thank you, Gail, a valid point. But then, you are a treasure trove of valid points!

          In response: if you buy a house to live in, its value becomes “use value”, not “exchange value” (if I may be permitted to cite Aristotle), so if you intend never to sell the house its market price becomes less of a problem. Secondly, as long as you can service the loan, well, at the end of the day the bank cannot throw your corpse into debtors’ prison.

          But on balance you make a good case. That is one reason I bought my present home for cash, and intend it to be my last.

          • ” and intend it to be my last.”

            Ah yes, the certainty of death and taxes. Only death may not be as certain as you think.

            One of the many ways the Singularity could manifest would be a sudden drop in the death rate. (And perhaps the birth rate as well.)

            What would be the effect if people thought they would live a long time beyond what is considered normal?

            I don’t know when the Singularity might happen, but I don’t see any way to avoid it.

            • Not exactly. If a person is buying a home with 20% (or any other percentage) down, there will be a balance payable, over a number of years. The longer the loan, the less the person would have to pay each month, partly because the forgiveness effect of the interest, and partly because of the term of the loan. Give me a 50 year or 100 year mortgage!

            • Around here we had amortization free loans until the other year, now new loans have to be amortized down to 50% (of initial market value) over 20 years.

              Loans running over 30 years.

              Amortization free and negative interest doesn’t seem to work without some feedback loop ensuring loan is below the market value.

            • We seem to end up with a lot of loans above market value, when the market value of housing falls. There are many government agency insured loans with only a 3.5% downpayment, so it is the lender who is on the hook in a downturn.

            • In other parts of the world you don’t get rid of the debt by returning the house. The bank sells it (probably don’t aim for best price), you own the difference.

              The operators of the system must keep market values at least close to the debts, and also not to many to default on their debts.

            • Perhaps that is why the sub-prime loan crisis was concentrated in the US. In at least some states when real estate prices drop, it is possible to simply give your key to whoever has your mortgage, and walk away. In some other states, it takes a couple of years after a person stops making payments on the mortgage, for the family to be kicked out. I don’t think that even then there is any attempt to collect the loss of value.

              The places that were most heavily hit had a high percentage of minority owners, in areas where banks had been encouraged to lessen their underwriting standards, at least in part to encourage more minority ownership of homes.

        • Wouldn’t supply/demand really drive up rents and down house prices if everyone all of a sudden insisted on renting?

          • Renters can’t afford very much, so I don’t think rents would necessarily go up. People would start living in rented houses in addition to rented apartments. Some of the rented houses would be subdivided, to accommodate two families, helping to push the number of units available up.

            Housing prices, in the scenario we discussed, were already going down. If people were poor and moving in with family more, it seems like the number of separately housed family units would go down. This would help push housing prices down further. If two families shared a home (after division), this would further reduce the required number of rental homes needed.

            • Thanks for pointing that out.

              Still I think it will be hard breaking peoples belief houses are great “investments” in the long term.

  3. “The announcement by Suncorp that it will no longer insure new thermal coal projects, along with a similar announcement by QBE Insurance a few months earlier, brings Australia into line with Europe where most major insurers have broken with coal.

    “US firms have been a little slower to move, but Chubb announced a divestment policy in July, and Liberty has confirmed it will not insure Australia’s Adani project.

    “Other big firms such as America’s AIG are coming under increasing pressure.”

    • Except coal is what keeps the world economy going. It seems to be the only fuel with true “net energy,” plus lots of pollution to go with that net energy.

        • It feels to me like we are teetering on the brink of GFC 2.0 now with risks multiplying all the time. I wonder if Trump’s softer stance on the trade war is a tacit acknowledgement of this.

          • I get the impression that Trump’s “on-again off-again” approach to adding tariffs is working beautifully (from the US point of view), for the time being. Scare and backoff a bit, then scare some more and back off.

            The rest of the world is badly crashing, but the US is more or less, holding up for the time being.

      • What me worry? Come now ….alarmist shrill….
        The economy has never been stronger and growth is solid….sarcasm

        The market’s most closely watched part of the yield curve inverted today, and if its record over the last half-century is any indicator, the U.S. could be headed for a recession soon.
        Shortly after 6 a.m. ET on Wednesday, the yield on the 10-year U.S. Treasury bond dipped below the yield on the 2-year U.S. Treasury as the 10-year fell 1 basis point below the 2-year. The yield curve inversion has a strong track record of predicting a recession; each of the last seven recessions (dating back to 1969) were preceded by the 10-year falling below the 2-year.
        Ahead of the last recession, the yield curve inverted briefly as early as December 27, 2005, about two years before the financial crisis sent the economy into recession.
        The Federal Reserve may have hoped that cutting rates in its July 31 meeting would have helped the yield curve steepen, since the shorter end of the curve closely tracks where the federal funds rate is.
        From Yahoo Finance

        Surprise, surprise, the so called Trump tax cuts are ending for Joe Did Pack….
        That should help push it …

          • “I get the impression that Trump’s “on-again off-again” approach to adding tariffs is working beautifully (from the US point of view), for the time being.”

            It is? Dow lost a tad over 800 points today after bonds flash recession warning sign:


            In great part why there are so many recent warnings about an impending recession is the effect the trade war is having. It’s reducing trade, which is the opposite direction of economic growth.

  4. And yet again, another link posted by a reader on Zero Hedge today.
    Are the FF embedded costs for solar power decreasing because of “efficiencies” in manufacturing of solar panels, or because the cost of oil is stabilized or even declining a bit, passing these savings onto solar to make it appear solar is more profitable now?

    As I recall, China had been furiously stockpiling oil and it might be argued may have an “oversupply,” -therefore cheaper to manufacture solar panels, yet why are they reportedly short on electricity and even having to go back to coal-during an economic slowdown? The nuclear power plants reportedly are not being brought online either.
    There is an incredible amount of disinformation out there. Are solar panels the new ghost cities and bridges to nowhere?

    • take the oil stockpiling to extremes, and the Chinese had almost all of it

      then what?

      without outlets for the stuff produced by oil energy, they would be just stuck with it.

      If the rest of the world couldn’t buy anything, the chinese wouldnt be able to sell anything

    • It seems like journals will publish almost anything.

      If solar panels are going to provide any significant share of electrical power, there clearly will be a lot of costs besides the solar panels themselves:

      Batteries to smooth end of day transitions.
      Very long distance transmission, especially in China.
      Cost of trying to keep these solar panels clean.
      Payment to coal and nuclear providers to provide 24/7/365 backup.

      These costs will increase, as more solar is added. The abstract gives no indication that they have been considered at all.

      • “Cost of trying to keep these solar panels clean.”

        Thank you, Gail, for again puncturing hype with reality.

        Yes, I have read many times about how we can cover large areas of desert with solar panels, and thereby power the world. Having lived in sub Saharan Africa, the situation was easy to visualise: shiny solar panels + lots of loose sand + high winds. What is wrong with this picture?

        Of course, the hype about power satellites is even more absurd. The Earth is warming, so the answer is to flood it with energy pulled out of space?

        • stating the obvious in rarely welcomed—been pointing out for years that anything in or near the sahara or any other desert gets covered in dust

          and the one thing you need to clean them just isnt there

          • China has the Gobi Desert up near where solar panels are installed. Sand from the Gobi Desert sometimes causes dust storms as far South as Beijing. I saw one of these dust storms, and it came close to blocking out the sun in Beijing.

        • There is also the smog problem of China and India. This seems to substantially reduce the benefit of solar panels.


          The article suggests getting rid of smog. Of course, smog is part of the global dimming that is taking place, which keeps the atmosphere from heating up more than it is. If you get rid of the smog to make the solar panels work, the population of the world needs to live with higher heat or it needs to use more air conditioning.

  5. I can’t figure out why Midland Texas housing is rising with falling oil prices and failing shale. Is shale strong in the region?

    • Midland Texas has a booming job market.
      Midland crushes nation in creating new jobs

      Midland led the U.S. with an 11.9 percent increase in employment, which is more than seven times the national percentage growth of 1.6 percent. Average weekly wages in Midland also rose by a staggering 7.4 percent, more than triple that of Houston, which increased by 2.1 percent.

      This article is behind a paywall, so I can’t figure out too much. The summary on Google seems to suggest that Midland is involved in jobs relating to the export of crude oil, and this has been growing by leaps and bounds.

      This article lists the top ten job markets in the country, as of July 2018.
      San Jose-Sunnyvale-Santa Clara, CA
      San Luis Obispo-Paso Robles-Arroyo Grande, CA
      Odessa, TX
      Midland, TX
      Charleston-North Charleston, SC
      Blacksburg-Christiansburg-Radford, VA
      Florence, SC
      Ann Arbor, MI
      Waterloo-Cedar Falls, IA
      Roanoke, VA

      Odessa and Midland Texas are near each other. They are ranked 3rd and 4th. The article says,

      Separated by less than a half hour from Odessa, Midland also offers a great job market for prospective workers.The city’s employment largely fluctuates with the petroleum industry, similar to Odessa.The 88,270 employed people in Midland rake in an average salary of $53,190.

      So it doesn’t look like the problems of the oil companies have hit workers yet, to any significant extent in this part of the world.

  6. It seems that all of the recycling we are sending abroad inadvertently leads to more wage disparity.

    ‘We Are Swamped’: How a Global Trash Glut Hurt a $25 Billion Industry

    India’s garbage business, from scrap pickers on the ground through layers of sorting middlemen to plastic pellet producers, is struggling with low prices after China restricted garbage imports.

    The jump in supply pushed prices down for the low-end Indian workers who pick through mountains of locally produced trash for raw materials to sell.

    That’s impacting an Indian trash economy powerful enough to have prompted its own migration pattern: thousands of families left their rural villages to collect garbage in cities. Now, with their garbage hauls worth less, many are returning home.

    For the pickers, the going price for a kilo, or 2.2 pounds, of plastic water bottles, which used to bring around 45 rupees—roughly 65 cents—is now worth only about 25 rupees—or 36 cents.

    The trash glut also lowered profits for industrial recycling companies who turn the trash into usable materials. Plastic pellets, the end-product after processing some plastic scrap, went from 80 rupees to 45 rupees a kilo.

    • It sounds like someone is starting to listen. The question is whether the rates, with all of the wind and negative prices part of the time, are attractive for anyone to want to come into the market. Natural gas peaking plants (which are relatively inefficient) are likely to be what is added. They have such low overhead that they can wait out negative and low price periods.

      • It becomes difficult to figure out what it cost to keep a peaking plant ready.

        If you go into the LCOE calculation, one of the factors is how much of the time is it operating. If you don’t know this, you can’t get an accurate idea of what it costs. I suspect that renewables will incur a substantial additional cost to keep the standby plants ready to pick up the load as wind fails.

      • Isn’t there also a question of how long the gas suppliers can wait out the low price periods? Fixed overhead is a period cost and does not vary, pipelines are expensive, have maintenance costs; at some point will this infrastructure be abandoned as expenses exceed revenue?
        Dennis L.

        • Right! We are now dealing with a situation where prices are too low for all fossil fuels. Prices also are too low for backup to intermittent electricity, which is the issue you are talking about. While the peaking plants may look cheap, the whole set of infrastructure (including pipelines and storage) that the system needs is not. Analysts tend to look at very narrow boundaries, when they consider costs. (It is easier this way, and those asking for the analysis like the results better this way.) Furthermore, hope seems to spring enteral that eventually electricity prices will rise, and everything will work out OK. The pricing system for incorporating intermittent wind and solar in the system is badly flawed; this is a major contributor to the low long-term electricity prices that drive backup producers out of the system.

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