The structural problems within the wind-power sector (on both sides of the Atlantic) are hardly a secret by now, marked by canceled contracts and some sharp falls in share prices. Siemens Energy has been one of the poster children for its woes (I wrote a bit about this situation, here, here, here, and here). The problems that the company is facing have clearly encouraged its CEO, Joe Kaeser, to speak out. What he has to say makes for a bracing read.
The German boss of Britain’s biggest wind turbine maker has warned energy bills will have to keep rising to pay for the green transition as he attacked “fairytale” thinking about net zero.
“Fairytale thinking” is one way of putting it. The uncomfortable truth is that rather too many of the assumptions about the viability of wind-power projects were based on the idea that ultra-low interest rates were going to be around for a long time, and, as for inflation, well, not to worry . . .
And how about that “cheap” wind power Brits were promised?
Kaeser suggests that that might take a while.
The Daily Telegraph:
Mr Kaeser told The Telegraph: “Every transformation comes at a cost and every transformation is painful. And that’s something which the energy industry and the public sector — governments — don’t really want to hear.
“I believe that for a while [customers] need to accept higher pricing.
“And then there might be innovation – about the weight of the blades, other efficiency methods, technology – so the cost can then go down again.
“But the point is, if there is no profit pool in an industry, why should that industry innovate?”
Indeed.
But the notion that customers “need” to accept higher pricing only stands up if they “need” to accept wind power (a technology that is being asked to do too much before it is ready), and, in a saner world, they would not. Sadly, however, that is not our world, and it is something that they will have to “accept” as a cost of an energy transition that has been poorly thought through and sold to voters with the help, in part, of estimates that all too often understate its cost. Europe’s climate policy-makers know that while there is popular support for net zero, voters are not prepared to pay very much to get there by the target date of 2050. It’s no surprise, therefore, that, as Kaeser notes, governments are unwilling to admit the full costs of what this transition will involve.
The Daily Telegraph:
If countries and developers are not prepared to put their money where their mouths are, they should rethink their plans for net zero altogether, he suggested.
“I think [the net zero targets] are realistic, but they come at a cost,” Mr Kaeser said. “You need to stick by the facts at some point, even though facts sometimes may not be liked.”
He added that energy supplies are governed by a triangle of “reliability, affordability and sustainability”, but “sustainability and affordability may conflict”.
Sustainability and affordability may conflict. Heresy!
The Daily Telegraph:
“If you want to have cheap energy, you need to be gas fired. That’s the cheapest way, the most secure way if you calculate the whole thing, from the beginning to the end.
“I believe people need to become reasonable about the energy transition.
“The matter of renewables being volatile — if there is a windless night, it could get complicated if you don’t have storage. So you need to think: what is my energy agenda? How much do I want to have on renewables? How do we deal with the fact that sometimes availability and demand don’t match?
“So you say, okay, maybe we do baseload nuclear. Then maybe gas fired or even hydrogen-fired gas turbines for peaks [in demand].”
But he added: “Where does the hydrogen come from? That story of green hydrogen is another fairytale. If you believe in the next five years, in industry it’s a feasible option — it’s not.”
As so often, the discussion about wind (and solar) reverts back to intermittency (the wind doesn’t always blow, and the sun doesn’t always shine). One of the enormous technological achievements of the last couple of centuries has been the extent to which humanity has been able to lessen its dependency on the vagaries of the weather and the availability of natural light. It would, to say the least, be a shame if this progress were, even if only partly, to be reversed.
And that risks being the case if climate policy-makers allow their obsession with net zero to lead them to lose sight of the limitations of today’s technology. #Science can be hard.