(For an alternative point of view see, “Counterpoint: Future of Energy is Renewables; Fossil Fuel Experts Feed CEO Greed”)
Despite huge enthusiasm for shifting from fossil fuels to green energy, this transition just isn’t happening. Implementing a significant change in our current trajectory would be prohibitively expensive. A major policy overhaul is needed.
On a global scale, we are investing nearly $2 trillion annually to create an energy transition. In the last 10 years, solar and wind power use has reached unprecedented levels. However, this increase hasn’t led to a reduction in fossil fuel consumption. In fact, fossil fuel use has grown during this period.
Numerous studies show that adding renewable energy adds to energy consumption instead of replacing coal, gas or oil. Recent research reveals that for every six units of new green energy, less than one unit displaces fossil fuels.
Analysis in the United States shows that renewable energy subsidies often increase total energy consumption. In essence, policies designed to boost green energy lead to more emissions.
Human demand for affordable energy is insatiable, as it underpins every facet of modern life. In the last 50 years, energy derived from oil and coal has doubled, hydropower has tripled, and gas has quadrupled. Meanwhile, there has been a significant rise in nuclear, solar and wind energy. Consequently, the availability of energy has reached unprecedented levels globally.
The attempt to drive a green energy transition mainly relies on the assumption that heavily subsidizing renewables will drive fossil fuels away effortlessly. A recent study challenged this notion, finding that during every previous addition of a new energy source, it has been “entirely unprecedented for these additions to cause a sustained decline in the use of established energy sources.”
Looking back further into humanity’s history, the current struggles with green energy should be no surprise. During the 1800s, as societies moved from wood to coal, overall wood consumption increased as coal began to meet a larger share of energy needs. Similarly, when transitioning from coal to oil, by 1970, the combined energy contributions from oil, coal, gas and wood were more significant than ever before.
What causes us to change our relative use of energy? One study investigated 14 shifts over the last five centuries, such as when the agricultural industry shifted from plowing fields with animals to fossil fuel-powered tractors. The main driver has always been that the new energy service is either better or cheaper.
Solar and wind fail on both counts. Unlike fossil fuels that can produce electricity whenever needed, solar and wind can produce energy only according to the vagaries of daylight and weather. And they are not cheap. At best, they are competitive on price only when the sun is shining, or the wind is blowing at just the right speed. The rest of the time, they are mostly useless and infinitely costly.
Factoring in the cost of just four hours of storage, wind and solar energy solutions become uncompetitive compared to fossil fuels. A sustainable transition to solar or wind would require orders of magnitude more storage, making this goal entirely unattainable.
Moreover, humanity has still not found green energy solutions for most of our transportation needs — think of planes and freight — and we haven’t even begun a transition to the vast energy needs of heating, manufacturing or agriculture. Solar and wind are entirely deployed in the electricity sector, which makes up just one-fifth of all global energy use. We are dealing with a small part of a vast challenge and ignoring all the “too hard” problems like steel, cement, plastics and fertilizer.
It should be no surprise that — despite much rhetoric supporting an energy transition — even the Biden administration expects oil, gas and coal will keep increasing up to 2050, even as renewable energy sources dramatically increase.
Achieving a genuine transition away from fossil fuels would necessitate massive subsidies for green energy, storage solutions and alternative technologies like hydrogen. It would also require substantial taxes on fossil fuels to make them less attractive. The management consulting firm McKinsey & Co. estimates that the cost of such a transition would exceed $5 trillion annually, with the actual economic effect potentially being five times higher due to its impacts on economic growth.
For residents of wealthier nations, this could translate to $13,000 per person yearly — an expense unlikely to be politically feasible.
A more practical approach would be to enhance green energy technologies significantly. This involves increased investment in research and development for renewable energy, storage solutions, nuclear power and other alternatives.
Reducing the cost of these green solutions below that of fossil fuels is essential for widespread global adoption, not just in affluent, climate-conscious countries.
When politicians tell you the green transition is here and we need to get on board, they are asking voters to continue bankrolling investment in failed strategies that don’t address the underlying problems. A more intelligent approach is needed to ensure that green energy technologies become viable and widely accessible.
