How Renewable Energy Models Can Produce Misleading Indications

The energy needs of the world’s economy seem to be easy to model. Energy consumption is measured in a variety of different ways including kilowatt hours, barrels of oil equivalent, British thermal units, kilocalories and joules. Two types of energy are equivalent if they produce the same number of units of energy, right?

For example, xkcd’s modeler Randall Munroe explains the benefit of renewable energy in the video below. He tells us that based on his model, solar, if scaled up to ridiculous levels, can provide enough renewable energy for ourselves and a half-dozen of our neighbors. Wind, if scaled up to absurd levels, can provide enough renewable energy for ourselves and a dozen of our neighbors.

There is a major catch to this analysis, however. The kinds of energy produced by wind and solar are not the kinds of energy that the economy needs. Wind and solar produce intermittent electricity available only at specific times and places. What the world economy needs is a variety of different energy types that match the energy requirements of the many devices in place in the world today. This energy needs to be transported to the right place and saved for the right time of day and the right time of year. There may even be a need to store this energy from year to year, because of possible droughts.

I think of the situation as being analogous to researchers deciding that it would be helpful or more efficient if humans could change their diets to 100% grass in the next 20 years. Grass is a form of energy product, but it is not the energy product that humans normally consume. It doesn’t seem to be toxic to humans in small quantities. It seems to grow quite well. Switching to the use of grass for food would seem to be beneficial from a CO2 perspective. The fact that humans have not evolved to eat grass is similar to the fact that the manufacturing and transport sectors of today’s economy have not developed around the use of intermittent electricity from wind and solar.

Substituting Grass for Food Might “Work,” but It Would Require Whole New Systems 

If we consider other species, we find that animals with four stomachs can, in fact, live quite well on a diet of grass. These animals often have teeth that grow continuously because the silica in grass tends to wear down their teeth. If we could just get around these little details, we might be able to make the change. We would probably need to grow extra stomachs and add continuously growing teeth. Other adjustments might also be needed, such as a smaller brain. This would especially be the case if a grass-only diet is inadequate to support today’s brain growth and activity.

The problem with nearly all energy analyses today is that they use narrow boundaries. They look at only a small piece of the problem–generally the cost (or “energy cost”) of the devices themselves–and assume that this is the only cost involved in a change. In fact, researchers need to recognize that whole new systems may be required, analogous to the extra stomachs and ever-growing teeth. The issue is sometimes described as the need to have “wide boundaries” in analyses.

If the xkcd analysis netted out the indirect energy costs of the system, including energy related to all of the newly required systems, the results of the analysis would likely change considerably. The combined ability of wind and solar to power both one’s own home and those of a dozen and a half neighbors would likely disappear. Way too much of the output of the renewable system would be used to make the equivalent of extra stomachs and ever-growing teeth for the system to work. The world economy might not work as in the past, either, if the equivalent of the brain needs to be smaller.

Is “Energy Used by a Dozen of Our Neighbors” a Proper Metric?

Before I continue with my analysis of what goes wrong in modeling intermittent renewable energy, let me say a few words about the way Munroe quantifies the outcome of his energy analysis. He talks about “energy consumed by a household and a dozen of its neighbors.” We often hear news items about how many households can be served by a new electricity provider or how many households have been taken offline by a storm. The metric used by Munroe is similar. But, does it tell us what we need to know in this case?

Our economy requires energy consumption by many types of users, including governments to make roads and schools, farmers to plant crops and manufacturers to make devices of all kinds. Leaving non-residential energy consumption out of the calculation doesn’t make much sense. (Actually, we are not quite certain what Munroe has included in his calculation. His wording suggests that he included only residential energy consumption.) In the US, my analysis indicates that residential users consume only about a third of total energy.1 The rest is consumed by businesses and governments.

If we want to adjust Munroe’s indications to include energy consumed by businesses and governments, we need to divide the indicated number of residential households provided with energy by about three. Thus, instead of the units being “Energy Consumed by a Dozen of Our Neighbors,” the units would be “Energy Consumed by Four of Our Neighbors, Including Associated Energy Use by Governments and Businesses.” The apparently huge benefit provided by wind and solar becomes much smaller when we divide by three, even before any other adjustments are made.

What Might the Indirect Costs of Wind and Solar Be? 

There are a number of indirect costs:

(1) Transmission costs are much higher than those of other types of electricity, but they are not charged back to wind and solar in most studies.

A 2014 study by the International Energy Agency indicates that transmission costs for wind are approximately three times the cost of transmission costs for coal or nuclear. The amount of excess costs tends to increase as intermittent renewables become a larger share of the total. Some of the reason for higher transmission costs for both wind and solar are the following:

(a) Disproportionately more lines need to be built for wind and solar because transmission lines need to be scaled to the maximum output, rather than the average output. Wind output is typically available 25% to 35% of the time; solar is typically available 10% to 25% of the time.

(b) There tend to be longer distances between where renewable energy is captured and where it is consumed, compared to traditional generation.

(c) Renewable electricity is not created in a fossil fuel power plant, with the same controls over the many aspects of grid electricity. The transmission system must therefore make corrections which would not be needed for other types of electricity.

(2) With increased long distance electricity transmission, there is a need for increased maintenance of transmission lines. If this is not performed adequately, fires are likely, especially in dry, windy areas.

There is recent evidence that inadequate maintenance of transmission lines is a major fire hazard.

In California, inadequate electricity line maintenance has led to the bankruptcy of the Northern California utility PG&E. In recent weeks, PG&E has initiated two preventative cut-offs of power, one affecting as many as two million individuals.

The Texas Wildfire Mitigation Project reports, “Power lines have caused more than 4,000 wildfires in Texas in the past three and a half years.”

Venezuela has a long distance transmission line from its major hydroelectric plant to Caracas. One of the outages experienced in that country seems to be related to fires close to this transmission line.

There are things that can be done to prevent these fires, such as burying the lines underground. Even using insulated wire, instead of ordinary transmission wire, seems to help. But any solution has a cost involved. These costs need to be recognized in modeling the indirect cost of adding a huge amount of renewables.

(3) A huge investment in charging stations will be needed, if anyone other than the very wealthy are to use electric vehicles.

Clearly, the wealthy can afford electric vehicles. They generally have garages with connections to electrical power. With this arrangement, they can easily charge a vehicle that is powered by electricity when it is convenient.

The catch is that the less wealthy often do not have similar opportunities for charging electric vehicles. They also cannot afford to spend hours waiting for their vehicles to charge. They will need inexpensive rapid-charging stations, located in many, many places, if electric vehicles are to be a suitable choice. The cost of rapid-charging will likely need to include a fee for road maintenance, since this is one of the costs that today is included in fuel prices.

(4) Intermittency adds a very substantial layer of costs. 

A common belief is that intermittency can be handled by rather small changes, such as time-of-day pricing, smart grids and cutting off power to a few selected industrial customers if there isn’t enough electricity to go around. This belief is more or less true if the system is basically a fossil fuel and nuclear system, with a small percentage of renewables. The situation changes as more intermittent renewables are added.

Once more than a small percentage of solar is added to the electric grid, batteries are needed to smooth out the rapid transition that occurs at the end of the day when workers are returning home and would like to eat their dinners, even though the sun has set. There are also problems with electricity from wind cutting off during storms; batteries can help smooth out these transitions.

There are also longer-term problems. Major storms can disrupt electricity for several days, at any time of the year. For this reason, if a system is to run on renewables alone, it would be desirable to have battery backup for at least three days. In the short video below, Bill Gates expresses dismay at the idea of trying to provide a three-day battery backup for the quantity of electricity used by the city of Tokyo.

We do not at this point have nearly enough batteries to provide a three-day battery backup for the world’s electricity supply. If the world economy is to run on renewables, electricity consumption would need to rise from today’s level, making it even more difficult to store a three-day supply.

A much more difficult problem than three-day storage of electricity is the need for seasonal storage, if renewable energy is to be used to any significant extent. Figure 1 shows the seasonal pattern of energy consumption in the United States.

Figure 1. US energy consumption by month of year, based on data of the US Energy Information Administration. “All Other” is total energy, less electricity and transportation energy. It includes natural gas used for home heating. It also includes oil products used for farming, as well as fossil fuels of all kinds used for industrial purposes.

In contrast with this pattern, the production of solar energy tends to peak in June; it falls to a low level in December to February. Hydroelectric power tends to peak in spring, but its quantity is often quite variable from year to year. Wind power is quite variable, both from year to year and month to month.

Our economy cannot handle many starts and stops of electricity supply. For example, temperatures need to stay high for melting metals. Elevators should not stop between floors when the electricity stops. Refrigeration needs to continue when fresh meat is being kept cold.

There are two approaches that can be used to work around seasonal energy problems:

  1. Greatly overbuild the renewables-based energy system, to provide enough electricity when total energy is most needed, which tends to be in winter.
  2. Add a huge amount of storage, such as battery storage, to store electricity for months or even years, to mitigate the intermittency.

Either of these approaches is extremely high cost. These costs are like adding extra stomachs to the human system. They have not been included in any model to date, as far as I know. The cost of one of these approaches needs to be included in any model analyzing the costs and benefits of renewables, if there is any intention of using renewables as more than a tiny share of total energy consumption.

Figure 2 illustrates the high energy cost that can occur by adding substantial battery backup to an electrical system. In this example, the “net energy” that the system provides is essentially eliminated by the battery backup. In this analysis, Energy Return on Energy Invested (EROEI) compares energy output to energy input. It is one of many metrics used to estimate whether a device is providing adequate energy output to justify the front-end energy inputs.

Figure 2. Graham Palmer’s chart of Dynamic Energy Returned on Energy Invested from “Energy in Australia.”

The example in Figure 2 is based on the electricity usage pattern in Melbourne, Australia, which has a relatively mild climate. The example uses a combination of solar panels, batteries and diesel backup generation. Solar panels and backup batteries provide electricity for the 95% of annual electricity usage that is easiest to cover with these devices; diesel generation is used for the remaining 5%.

The Figure 2 example could be adjusted to be “renewable only” by adding significantly more batteries, a large number of solar panels, or some combination of these. These additional batteries and solar panels would be very lightly used, bringing the EROEI of the system down to an even lower level.

To date, a major reason that the electricity system has been able to avoid the costs of overbuilding or of adding major battery backup is the small share they represent of electricity production. In 2018, wind amounted to 5% of world electricity; solar amounted to 2%. As percentages of world energy supply, they represented 2% and 1% respectively.

A second reason that the electricity system has been able to avoid addressing the intermittency issue is because backup electricity providers (coal, natural gas, and nuclear) have been forced to provide backup services without adequate compensation for the value of services that they are providing. The way that this happens is by giving wind and solar the subsidy of “going first.” This practice creates a problem because backup providers have substantial fixed costs, and they often are not being adequately compensated for these fixed costs.

If there is any plan to cease using fossil fuels, all of these backup electricity providers, including nuclear, will disappear. (Nuclear also depends on fossil fuels.) Renewables will need to stand on their own. This is when the intermittency problem will become overwhelming. Fossil fuels can be stored relatively inexpensively; electricity storage costs are huge. They include both the cost of the storage system and the loss of energy that takes place when storage is used.

In fact, the underfunding issue associated with allowing intermittent renewables to go first is already becoming an overwhelming problem in a few places. Ohio has recently chosen to provide subsidies to coal and nuclear providers as a way of working around this issue. Ohio is also reducing funding for renewables.

 (5) The cost of recycling wind turbines, solar panels, and batteries needs to be reflected in cost estimates. 

A common assumption in energy analyses seems to be that somehow, at the end of the design lifetime of wind turbines, solar panels and batteries, all of these devices will somehow disappear at no cost. If recycling is done, the assumption is made that the cost of recycling will be less than the value of the materials made available from the recycling.

We are discovering now that recycling isn’t free. Very often, the energy cost of recycling materials is greater than the energy used in mining them fresh. This problem needs to be considered in analyzing the real cost of renewables.

 (6) Renewables don’t directly substitute for many of the devices/processes we have today. This could lead to a major step-down in how the economy operates and a much longer transition. 

There is a long list of things that renewables don’t substitute for. Today, we cannot make wind turbines, solar panels, or today’s hydroelectric dams without fossil fuels. This, by itself, makes it clear that the fossil fuel system will need to be maintained for at least the next twenty years.

There are many other things that we cannot make with renewables alone. Steel, fertilizer, cement and plastics are some examples that Bill Gates mentions in his video above. Asphalt and many of today’s drugs are other examples of goods that cannot be made with renewables alone. We would need to change how we live without these goods. We could not pave roads (except with stone) or build many of today’s buildings with renewables alone.

It seems likely that manufacturers would try to substitute wood for fossil fuels, but the quantity of wood available would be far too low for this purpose. The world would encounter deforestation issues within a few years.

(7) It is likely that the transition to renewables will take 50 or more years. During this time, wind and solar will act more like add-ons to the fossil fuel system than they will act like substitutes for it. This also increases costs.

In order for the fossil fuel industries to continue, a large share of their costs will need to continue. The people working in fossil fuel industries need to be paid year around, not just when electrical utilities need backup electrical power. Fossil fuels will need pipelines, refineries and trained people. Companies using fossil fuels will need to pay their debts related to existing facilities. If natural gas is used as backup for renewables, it will need reservoirs to hold natural gas for winter, besides pipelines. Even if natural gas usage is reduced by, say, 90%, its costs are likely to fall by a much smaller percentage, say 30%, because a large share of costs are fixed.

One reason that a very long transition will be needed is because there is not even a path to transition away from fossil fuels in many cases. If a change is to be made, inventions to facilitate these changes are a prerequisite. Then these inventions need to be tested in actual situations. Next, new factories are needed to make the new devices. It is likely that some way will be needed to pay existing owners for the loss of value of their existing fossil fuel powered devices; if not, there are likely to be huge debt defaults. It is only after all of these steps have taken place that the transition can actually take place.

These indirect costs lead to a huge question mark regarding whether it even makes sense to encourage the widespread use of wind and solar. Renewables can reduce CO2 emissions if they really substitute for fossil fuels in making electricity. If they are mostly high cost add-ons to the system, there is a real question: Does it even make sense to mandate a transition to wind and solar?

Do Wind and Solar Really Offer a Longer-Term Future than Fossil Fuels?

At the end of the xkcd video shown above, Munroe makes the observation that wind and solar are available indefinitely, but fossil fuel supplies are quite limited.

I agree with Munroe that fossil fuel supplies are quite limited. This occurs because energy prices do not rise high enough for us to extract very much of them. The prices of finished products made with fossil fuels need to be low enough for customers to be able to afford them. If this is not the case, purchases of discretionary goods (for example cars and smart phones) will fall. Since cars and smart phones are made with commodities, including fossil fuels, the lower “demand” for these finished goods will lead to falling prices of commodities, including oil. In fact, we seem to have experienced falling oil prices most of the time since 2008.

Figure 3. Inflation adjusted weekly average Brent Oil price, based on EIA oil spot prices and US CPI-urban inflation.

It is hard to see why renewables would last any longer than fossil fuels. If their unsubsidized cost is any higher than fossil fuels, this would be one strike against them. They are also very dependent on fossil fuels for making spare parts and for repairing transmission lines.

It is interesting that climate change modelers seem to be convinced that very high amounts of fossil fuels can be extracted in the future. The question of how much fossil fuels can really be extracted is another modeling issue that needs to be examined closely. The amount of future extraction seems to be highly dependent on how well the current economic system holds together, including the extent of globalization. Without globalization, fossil fuel extraction seems likely to decline quickly.

Do We Have Too Much Faith in Models? 

The idea of using renewables certainly sounds appealing, but the name is deceiving. Most renewables, except for wood and dung, aren’t very renewable. In fact, they depend on fossil fuels.

The whole issue of whether wind and solar are worthwhile needs to be carefully analyzed. The usual hallmark of an energy product that is of substantial benefit to the economy is that its production tends to be very profitable. With these high profits, governments can tax the owners heavily. Thus, the profits can be used to aid the rest of the economy. This is one of the physical manifestations of the “net energy” that the energy product provides.

If wind and solar were really providing substantial net energy, they would not need subsidies, not even the subsidy of going first. They would be casting off profits to benefit the rest of the economy. Perhaps renewables aren’t as beneficial as many people think they are. Perhaps researchers have put too much faith in distorted models.


[1] This is my estimate, based on EIA and BP data. With respect to electricity, EIA data shows that in the US, residential users consume about 38% of the total. With respect to fuels that are not used for transportation and not used for electricity, US residential users consume about 19% of these fuels. Combining these two categories, US households use about 31% of non-transportation fuels.

With respect to transportation fuels, the closest approximation we can get is by looking at petroleum use, divided between gasoline and other products. According to BP data, on a worldwide basis, 26% of petroleum is burned as gasoline. In the United States, about 46% of petroleum consumption is burned as gasoline. Of course, some of this gasoline usage is for non-residential use. For example, cars used by police and sales representatives are typically powered by gasoline, as are small trucks used by businesses.

Furthermore, the US is a major importer of manufactured goods from China and other parts of the world. The embodied energy in these imported goods never gets into US energy consumption statistics. In theory, we should add a little energy consumption by foreign manufacturers to supplement total reported US energy consumption.

The selection of “about a third” is based on these considerations.










1,605 thoughts on “How Renewable Energy Models Can Produce Misleading Indications

  1. Anybody researching in detail into Dem primaries yet?
    Some pundits observe it roughly resembles that Rep primaries mess of previous cycle, which trashed the old alliances. To me it looks like a snake pit of double, triple agents war-faring for various factions behind the curtain.

    For example, the Gabbard girl (mil-isolationist-conservative), neutralized the Clintonoid horse Kamala in just few minutes like in Asian action movie. Gabbard also for some strange reason now (nobody interested anymore) talks about Saudi involvement in 9/11 – at the same time their Aramco IPO attempt is also debated. Weird.

    Biden is a joke placeholder candidate of zero appeal, self destructing himself.

    Late/new entry Bloomberg’s mission is to deny Sanders NY votes and also trim down Warren.

    Warren is a former Republican, lite corporatist and war wing conformist of the Dem party.

    Sanders is perhaps a genuine social reformer but with dubious foreign policy.

    Yang seems as genuine reformist, but his UBI proposals seems as B-plan for the bankers when they had to front run raging socialists.

    = when there are way more than two-three factions fighting over it usually means the system is very wobbly near collapse or significant reshuffle approaching, that’s why my interest in it..

    • My thoughts on almost the whole lot of them:

      “Here richly, with ridiculous display,
      The Politician’s corpse was laid away.
      While all of his acquaintance sneered and slanged
      I wept: for I had longed to see him hanged.”

      (Hilaire Belloc)

      Except for Tulsi Gabbard, who I think would be
      the ideal running mate for Trump 2020. One who
      tells the truth as he sees it; the other who tells
      the truth as it is.

      • I am concerned with the whole ship sinking with all of us on it and you are concerned about what shirts the captain will be wearing when it does…… OK BOOMER!

        • But, Denial, if someone, anyone, had removed Captain Smith from the bridge, perhaps the ship might have been saved, on a night not to remember.

      • Gabbard trump 2020? Not sure Trump would accept vice president position… :). Great idea though.

      • Because the Carbon Credit Economy bears -like everything else – no relation to the physical economy?

        Ah, what’s this? !

        A Time Portal!

        I think I’ll step through it and come out somewhere rather more real than this implausible show we are trapped in …….

      • They cut down trees to make pellets for ‘green’ power stations and use the carbon credits to plant seedlings. In 100 years time the carbon produced by burning the pellets and flying the aircraft will back back in the trees – or maybe not. But then its too late anyway.

  2. Is OuR SyStEm sCReWed Up oR Not?
    Airlines are flying tons of unneeded fuel around the world to save as little as $52 by not filling up in countries with higher prices
    Sinéad Baker

    WWII veterans place wreaths at memorial in Washington, D.C.
    Airlines are flying tons of unneeded fuel around the world to save as little as $52 by not filling up in countries with higher prices
    Sinéad Baker
    Business InsiderNovember 11, 2019, 6:00 AM EST
    british airways
    british airways
    Nicolas Economou/NurPhoto via Getty Images

    Airlines are carrying tons of extra fuel on flights, a practice that lets them avoid paying for fuel in countries where it’s more expensive — at the cost of the environment.

    The practice was revealed by the BBC’s “Panorama” show, which received leaked documents showing the practice at British Airways. It is believed to be widespread in the industry.

    It is bad for the environment because carrying unneeded fuel makes a plane heavier and therefore causes it to emit more carbon products.

    Documents showed that British Airways planes were carrying tons of extra fuel for the sake of small savings — sometimes barely $50 on a whole plane’s worth of fuel.

    The BBC estimates that the practice produced 18,000 metric tons of unnecessary carbon dioxide in 2018.

    British Airways said in response that it would consider changing its process.

    Sure…Don’t call me, I’ll call you….
    Where’s Greta?

      • Interesting how the airlines will calculate the fuel requirements for each flight and fill the tanks to that required amount plus the FAA required 45 minute IFR (instrument flight rule) reserve. So apparently the airlines calculate the extra cost of flying with unused fuel.

    • Extra fuel makes the aeroplane heavier, which causes it to burn more fuel. I doubt the $50 saved makes up for the cost of that extra fuel burned.

      The practice sound to me like the harebrained idea of a bean counter bureaucrat who knows nothing of the physics of heavier than air flight.

      • I expect the $50 is calculated as the saving from buying cheaper fuel minus the cost of the extra fuel used to carry the heavier load.

        • I expect you and DJ are both right. But what does that imply? That British Airways are saving money by increasing their emission of CO2. In other words, BAU.

    • Actually she is right. Ecosystems are dying. Infinite growth is impossible. Its just her anger that is misplaced. Anger is just fear. Maybe they will get out guillotines and burn it all down. Then they will be in charge surrounded by ashes and baskets of heads. Who gets the anger then because the fear will still be there?

      • You are right. The anger is misplaced. This is simply the way the system is designed to work. Economies grow and collapse, just as humans get old and die. We had the good fortune to have the most goods and services of any people ever. But that privilege goes with seeing in collapse.

        • I don’t know that it’s misplaced. From her point of view, us old, privileged folk have had it so good that we didn’t think of the future we were leaving for coming generations. Now it’s clear what we’re doing but we’re still doing it it. I’m not surprised she’s angry; eventually all her generation will be angry at what we did and how we ignored our scientists.

          • yes, her grandparents and especially her parents “had it so good” because of FF…

            but does she really understand that her position of reducing carbon emissions to net zero has the consequence of reducing economic activity by at least 90%?

            I doubt that she has a full understanding of those consequences…

  3. EIA reports the average cost for utility scale battery systems to be about $1500 per kWh. At that rate the batteries needed for backing up a solar or wind facility for three days cost around 30 times as much as the RE facility. But wind is often unpowered for more like seven days, during huge stagnant high pressure episodes. Thus the backup battery cost is more like 100 times the wind farm cost. Batteries are not feasible.

    • “Batteries are not feasible”

      I generally agree with you, but even a small amount of storage helps. LAWP is contracting to buy power (somewhat subsidized) for 3.3 cents/kWh. This includes enough storage to keep the output going for 4 hours after the sun goes down.

      Increasing the storage from 200 MW to 300 MW is an option that raises the cost from 3.3 cents to 3.96 cents/kWh. I could back-calculate how much the storage costs, but I am not certain I would get it right. The other project you might look at is StratoSolar. They have the PV floating at 20 km, way above any clouds. So the sun comes up on the platform without fail. I.e., clouds will not block the sunlight for days on end.

      StratoSolar has talked about lifting weights up to the platform as a way to store excess power. Lowering the weights gets the power back.

    • For solar it’s worth considering the cost at a household scale. Typical (small) household usage may only peak at 1kw or so, and solar can work in even low light conditions. Overnight, running a refrigerator may only need 1kWhr of storage for example? What is the all in cost of a PV + storage for a typical household, compared to cost of electricity and/or other fuel over 25 years?

      • I have solar panels here in UK. It is now government policy to force users away from gas to electric heating. My current energy bill for the year is about two thirds for (winter) gas heating and one third for electricity. If I moved from gas to electric heating, my energy bill would rocket. My panels produce lots of electricity on summer days – when I do not need it, and almost nothing in the winter – when I would need it. The benefit to me is that I am paid about four times as much for the electricity I produce to the grid as I pay for electricity that I use. Another one of those government subsidy election promises.
        Adding batteries would simply reduce the electricity I sell to the grid and I would lose money.
        Even if I was not receiving the subsidized payment rate, batteries would only give me electricity on summer evenings, when I use little energy and I would never even cover the installation costs.

  4. Pingback: Energy And Environmental Newsletter – November 11th 2019 | PA Pundits - International

  5. “…what’s particularly worrying about this economic slowdown is that the recovery from the global financial crisis is not finished…

    “If there was a debt crisis, that would likely tip an economy into recession. As economic growth slows, it could become harder for firms and households to repay the debt that they borrowed. It’s not dissimilar for governments. As income growth slows, debt become less manageable. That could affect banks as the monies that they lent may not be repaid which weakens their balance sheet. So, a slowdown that triggers a debt crisis could then become a recession or worse.”

    • “It’s as bad a time for the global economy as any since the end of the last recession, according to two separate surveys released on Monday.

      “The IHS Markit global business outlook—which surveys 12,000 companies three times a year—fell to the worst level since 2009, when data was first collected.

      “The Ifo world economic outlook, which surveys 1,230 people in 117 countries, fell in the fourth quarter to the worst level since the second quarter of 2009.”

      • “Ratings agency Moody’s has issued a debt downgrade warning to the entire world on fears that political turmoil from Westminster to Hong Kong poses a threat to the economy.

        “It cut its global sovereign outlook to “negative” from “stable” for 2020, cautioning that “disruptive and unpredictable” politics was worsening the slowdown in growth.”

        • wow…

          downgrading the entire world!

          that’s quite amazing that Moody’s is actually responding to reality, and not ignoring the actual events that appear before our very eyes…

          I wonder what they would say if they knew it wasn’t just political instability, which is on the surface, but if they knew it was worldwide energy resource depletion that was the foundation of the surface problems…

          • I was very amused by this. Moody’s in stern, finger-wagging mood – the global populace an errant child.

      • “…the [stock] market rallies appear to be at odds with the fundamentals and would seem to have more to do with liquidity, giving rise to a ‘disconnect’ whereby markets ‘melt up’ seemingly regardless of the economic landscape.

        “This can only continue if the fundamental news begins to get better, catching up with the positive market trends. So far there are few signs that this is happening and with risks over trade, Brexit and geopolitics having not gone away, it is probably wise to view such a ‘disconnect’ cautiously.”

        • “This can only continue if…”

          only if CBs want it to continue…

          and they do want it to continue, and will continue to make sure that it continues…

  6. Your post on the Green New Deal does not take account of the transmission grid. On a continental scale the wind never stops blowing. A suitably designed grid serving a well chosen network of wind farms should never run short of energy. In addition, there are storage technologies, such as sodium-sulfur batteries which can solve any remaining intermittancy issues.

    • The problem is that a nationwide grid that would carry enough electricity for this purpose would be vastly more more expensive than today. It also would have to be maintained properly, or it would start fires everywhere. Hawaii would still be a problem. Even with this large a grid, storage is likely to be a big problem. We have seasonal storage needs that more transmission can’t help. Heating in winter using solar from summer doesn’t work.

      • “Unfortunately wind stops blowing for a week or three over whole continents”. True.
        And taking Europe for example, even if there were areas where the wind continued to blow that area would need to have enough installed capacity to power the whole of the rest of Europe as well (10 times, 20 times?). So, for example, UK would need to have enough installed wind and solar to power the whole of Europe. For maybe a couple of weeks a year! The rest of the year it would not be needed.
        As would Iberia, as would Germany, as would Poland, as would etc etc. So each country in Europe would need to install 10 to 20 times more capacity than needed for that country alone. Plus the cost of the grid. Plus the costs of smoothing the erratic flow of electricity. It soon gets to be to be quite expensive.
        Of course Europe could rely on huge solar farms in stable and reliable areas such as North Africa and the Middle East.

    • if India goes down like Venezuela, this will be the biggest humanitarian crisis ever…

      perhaps 2021, maybe even sooner…

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