By Paul Homewood
Can renewable energy replace fossil fuels?
Fossil fuels v Renewable energy?
Let me begin by stating that I am not for or against anything. In the free market, the best technologies, solutions and products automatically come first without subsidies, regulations and authorization.
If renewable energy is all that is promised, it will.
There is no doubt, of course, that the cheap, abundant and reliable energy provided by fossil fuels has transformed society and made us all better off than ever before in so many ways.
We get rid of them at our own risk!
So far, our transition to renewable energy in the UK has been slow and extremely expensive. Wind and solar power still provide just 3% of the UK’s total energy consumption after two decades of trying. Meanwhile, according to the Office for Budget Responsibility, subsidies for renewable energy are expected to be worth £12 billion by 2021/22. This really understates the reality because it doesn’t include all the indirect costs associated with balancing the grid etc, meaning the real cost could be more than £15 billion.
Of course, it’s true that the recent spike in gas prices has put the agenda back on the agenda. But it’s important to note that current prices do not reflect the cost of extracting gas. It is the result of an imbalance of supply and demand. Such imbalances have happened before, and a normally functioning market would rapidly increase gas production, pushing prices back to historic levels.
But even before prices rose, it was claimed that wind and solar power were cheaper than fossil fuels. However, such claims do not take into account the additional system costs imposed by their potential for disruption.
Furthermore, claims that offshore wind costs have now come down to around £40/MWh are simply not supported by evidence. Claims stem from an agreed-upon price for Contracts for Difference, the government’s subsidy mechanism. However, wind farms have no legal obligation to actually receive these contracts; they are just effective options.
A detailed examination of the company’s actual accounts continues to show that capital costs to build offshore wind farms have not decreased significantly in recent years and that operating costs can actually enter around £100/MWh. To make this happen, wholesale electricity prices have historically been below £50/MWh.
Solar power has certainly come down in price in recent years, but the technology is a dead end in the UK, because of our latitude. In winter, when electricity demand is highest, our solar farms typically operate at only 2% of their capacity.
Solar power certainly has a future in sunnier climates. But even in India, for example, the government has realized that it cannot run the grid entirely on intermittent power. Even their ambitious plans project only that 11% of their energy will come from wind and solar by 2040.
And of course the possibility of interruption is the most important issue here. You can forget about batteries and other forms of storage, as they can usually only provide power for an hour or two. This is useless when the wind stops blowing for days and weeks at a time.
Hydrogen is often produced as the answer to all of our problems, replacing the gas needed to support wind farms and heat our homes. However, even the Committee on Climate Change accepts that most of our hydrogen will have to be made with steam-modified natural gas.
This process is not only expensive, but also wastes a lot of input gas. In other words, you need more gas to make hydrogen than you would need if you just ignited the gas itself in the first place. Worse still, the steam reclamation process releases carbon dioxide, so you need to equip a carbon capture system, which adds to the cost.
In general, hydrogen produced in this way will be twice the cost of gas in terms of energy. Crucially, however, you still need as much natural gas as you do now, and much more. Without replacing fossil fuels, hydrogen increases our dependence on them.
The alternative is green hydrogen, which is produced by electrolysis. It is often suggested that surplus wind power be used for this. However, the amount of hydrogen that could be produced in this way would be very small, as well as extremely expensive due to the discontinuity of the process.
The bottom line is that we will still need gas and a lot of it to support a renewable heavy grid system. Indeed, the more regenerative capacity we build, the more backups we need.
And that’s just the electrical consideration. We need more gas for heating and industrial use.
The biggest problem with using hydrogen, or with respect to electricity, for heating in your home is how you deal with peak winter demand. On average during the year, the demand for gas is almost double the demand for electricity. But in winter, the peak gas demand is seven times more.
To get the scale of the numbers up, gas consumption peaks at around 350 GW in the middle of winter. Current government plans target wind capacity of 45 GW by 2035, which will produce only 15 GW on average, and typically at least 2 GW.
Of course, you can store gas very easily, so that it can be turned on and off as needed. Green hydrogen, mostly produced in the summer when electricity demand is low, will have to be stored for winter use, something for which there is no ready solution.
There are many benefits given to those who claim hydrogen is the way forward and call on the government to “invest”. But what they really are after the fat allowance will come with it.
The simple fact is that we will continue to need fossil fuels for many years to come. In the long run, we’ll be looking to develop new technologies like nuclear fusion, or build small nuclear reactors and things like that if we want to decarbonise.
Renewable energy has an important part, but it can never be the whole answer.
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