Who Would You Believe, Some Research Assistants From Oxford or Your Lyin Eyes? – Is it good?

From Manhattan Contrarian

Francis Menton

In Europe, and especially in countries at the forefront of the green energy transition, the colossal costs of this madness are already beginning to hit. In the UK, the average annual consumer energy bill is expected to increase on October 1 to £3549/year, from just £1138/year just a year ago. (This number can now be reduced somewhat by massive government subsidies, which only mask, but do not reduce, the disastrous cost increase.) Consumption gas bill according to German regulations is expected to increase on average annually on October 1 by about 480 euros, about 13%, from an already high 3568 euros.

Anyone with a pair of eyes could see what happened. They think they can get rid of fossil fuels just by building more wind turbines and solar panels, which don’t work most of the time. Then they stopped the production of fossil fuels, because that was the right thing to do. Somehow, they have lost sight of the fact that they need adequate backup for wind and sun, and have no alternative to restrained fossil fuels. With the supply of fossil fuels intentionally and artificially limited, prices have skyrocketed.

And they’re not even getting 50% of their electricity, or 15% of their final consumption, from wind/solar on an annual basis.

Is anyone learning a lesson here? Suspect.

Into the mix just came out on September 13, a big new paper from a group of geniuses at Oxford University, titled “Technological forecasting based on experience and energy transition”. The main author’s name is Rupert Way. For you to have more reading pleasure, here is another link approximately 150 pages of “Additional Information” accompanies the article. The release of the Oxford paper was soon followed by dozens (possibly hundreds) of articles from regular suspects in the press hailing the exciting news – Switching to renewables would save thousands Billion !!!!!

Does anyone really believe this? A few examples:

  • From the BBC, September 14: “Switching to renewable energy could save trillions – study.“”An Oxford University study says switching from fossil fuels to renewable energy could save the world up to $12 million (£10.2 million) by 2050.The BBC interviewed one of the study’s co-authors: “[T]The researchers say that going green now makes economic sense because renewable energy costs are falling. Professor Doyne Farmer from the Institute for New Economic Thinking at Oxford Martin told BBC News: “Even if you are a climate protester, you should do what we are advocating for. “Our central conclusion is that we should go full speed with the green energy transition because it will save us money,” he said.
  • From MSN, September 13: “Going green could save the “trillions” of the world – do the research.” “The report says predictions that moving quickly towards cleaner energy sources is costly are false and overly pessimistic. Even without the currently very high gas prices, the researchers say that going green now makes economic sense because renewable energy costs are falling. “
  • Natural World News, September 14: “Due to rising oil prices, switching to renewable energy could save trillions compared to using fossil fuels.” “An Oxford University study claims that switching from fossil fuels to renewable energy could save the world $12 trillion (£10.2 trillion) by 2050. . However, the researchers assert that the declining cost of renewable energy means that going green now makes financial sense.”

There are dozens of other of these if you care to do an internet search.

My main answer is: This article and others like it is exactly why we as citizens and taxpayers need to ask for a fully cost-effective and effective demonstration project first. when we allow all of us to be used as guinea pigs in the realization of these absurd wind/sun fantasies. As I wrote in a post just a few days agoIf this is so easy and will save a lot of money, then California and New York should show the rest of us how it’s done before others are forced to follow suit.

The basic technique of the authors here is to fool anyone who tries to read their work with the mountain of complex sounds of mumbo-jumbo. Example (from the Summary): “[W]e uses an approach based on statistically validated probabilistic cost forecasting methods by back-testing on more than 50 technologies. . . . “ Obviously the hope is that no one can get through the dust, and all anyone will come with is “We’ll save $12 trillion!”

Well, the Manhattan Contrarian isn’t quite snowing easily. Based on the waste of my precious time, here is what I believe to be the main problem of the job:

  • The main driver of the whole thing is the forecast of a rapid and continuous decline in the cost of wind turbines, solar panels and batteries. The assumption is that the cost of these things will continue to decrease exponentially with no limit indefinitely in the future. From the “Results” section: “We do not know of any empirical evidence to support floor costs and do not impose them. . . “ Of the three technologies in question (wind, solar and battery), the one that I am most familiar with is the battery. Here’s How, et al., charts the price history of batteries and predicts them for future use:

It’s a logarithmic scale to the left. So the graph shows that the cost of a Li-ion battery will drop from around $100/[k]Wh in 2020 to something from $2/[k]Wh and about $80/[k]Wh in 2050, with the midpoint of the forecast around $20/[k]Uh.

And in the real world? In June 2021, the government’s National Renewable Energy Laboratory released a document called “Cost forecast for utility-scale battery storage: 2021 update”. The NREL figure for 2020 utility-scale Li-ion battery costs (page iv of the Executive Summary) is $350/kWh, compared with $100/kWh for Way, et al. The difference seems to lie mainly in the elements of the real world battery installation and not the core battery itself, like a building to house it, the AC to DC converters and vice versa, the connection grid, “factory balance”, etc. So let’s say we start with a slight difference in starting point. NREL also forecasts future costs to fall, but only to average around $150/kWh by 2050, 50% above Way et al.’s starting point and more than an order of magnitude above average point of the Way, et al. Forecast for 2050.

And now that we’re a few years past 2020 so how will it play out? Utility Dive has products from April 12, 2022, reports on New York’s progress in grid-scale battery purchases to advance its ambitious Net Zero agenda. Excerpt: “Installation costs of retail, non-residential projects recently won an average of $567 per kWh, according to DPS archived April 1 report. In 2020-21, the average installation cost of such projects is $464 per kWh.” In other words, instead of going down, costs go up rapidly. The reason, from Utility Dive: Tight supply chains, growing demand for batteries, and the cost of using lithium in ubiquitous lithium-ion batteries make the long road ahead very difficult, the experts said. towel”. Utility Dive later cited New York regulators as saying they expect costs to come down by the end of the current decade. Sure.

  • As wind turbine and solar panel prices continue to drop rapidly, I’ll believe it when I see it. Yes, there has been a significant drop so far. But at this point, I consider these to be mature technologies. The main problems in their construction and operation are the extraction and processing of large quantities of metals and minerals, the formation of metals and minerals in the equipment, the transportation of the equipment (very large and heavy). to their locations and install them. How did those get cheaper by any significant amount, let alone another order of magnitude?
  • The treatment of the problem of energy storage in this paper is completely inappropriate, and far-fetched. The cost imaginings for short-term storage have been discussed above. For longer-term storage, from Supplementary Information, pages 38-45, it appears that the proposed solution is almost entirely hydrogen, which is supposed to be produced by electrolysis from water. (Here, they essentially refer to the proposed storage medium as “P2X fuel,” somehow implying that it could be something other than hydrogen, like New York and imaginary “DEFR.” its.). Currently there are essentially no prototype or demonstration projects of this so-called “green hydrogen” anywhere in the world from which realistic cost projections can be derived. (Are from JP Morgan Asset Management Annual Energy Report 2022page 39: “Current green hydrogen production is negligible. . . . “). Way, et al., cites some of the costs of existing electrolyzers, but I could find no discussion in the paper about the problem of producing hydrogen on a sufficient scale to support an entire electrical system. the world will require ocean electrolysis. And where will the millions of tons of toxic chlorine gas generated – go? The problems of dealing with huge amounts of hydrogen – like fires, pipeline blockages, and the like – are solved with a wave of the hand. The creation of a huge green hydrogen infrastructure to back up wind and solar has not even been started by the most fanatics of green energy fanatics like Germany, California or New York. They look at actual costs and considerations.

Way, et al.’s answer to any of these objections is, you just have to start building the facilities in large enough numbers and we can assure you that the cost will be quickly dropped like a rock. After all, we have “Probabilistic cost forecasting method” was “Valid by feedback on over 50 technologies. . . . “

Perhaps I should mention that the authors of Way, et al. includes a senior professor and a range of research assistants and following materials. Senior Professor (J. Doyne Farmer) is a mathematician and economist. My own path as a “Postdoctoral Research Officer”. Matthew Ives is a “Senior Research Officer” who previously worked on the implementation of South Australia’s Net Zero plans. Penny Mealy is an economist at the World Bank with the title “Contributor” at Oxford. All four are part of something at Oxford called the Institute for New Economic Thinking. Lead author Way appears to be under 30 years old. All four specialize in mathematical modeling, and none seem to have any expertise (at least none they are willing to admit) on how to design a working grid.

We can all see in Europe what happens when you try to get rid of fossil fuels and replace them with wind and solar, without an alternative plan for storage and backup with Full cost and designed and ready to use when you need it. But in the face of an ongoing disaster, Way, et al., say, double down! We assure you that if you now only spend enough on renewable energy and an untested hydrogen system, the costs will come down and in the end it will all save you trillions of dollars. . And after all, they are really smart people working for Oxford.

For the full article, click here.


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