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Renewable Energy Will Not Support Economic Growth

June 5, 2015


The world needs to end its dependence on fossil fuels as quickly as possible. That’s the only sane response to climate change, and to the economic dilemma of declining oil, coal, and gas resource quality and increasing extraction costs. The nuclear industry is on life support in most countries, so the future appears to lie mostly with solar and wind power. But can we transition to these renewable energy sources and continue using energy the way we do today? And can we maintain our growth-based consumer economy?

The answer to both questions is, probably not. Let’s survey four important sectors of the energy economy and tally up the opportunities and challenges.

The electricity sector: Solar and wind produce electricity, and the fuel is free. Moreover, the cost of electricity from these sources is declining. These are encouraging trends. However, intermittency (the sun doesn’t always shine, the wind doesn’t always blow) still poses barriers to high levels of solar-wind electricity market share. Grid managers can easily integrate small variable inputs; but eventually storage, capacity redundancy, and major grid overhauls will be necessary to balance inputs with loads as higher proportions of electricity come from uncontrollable sources. All of this will be expensive—increasingly so as solar-wind market penetration levels exceed roughly 60 percent. Some of the problems associated with integrating variable renewables into the grid are being worked out over time. But even if all these problems are eventually resolved, only about one-fifth of all final energy is consumed in the form of electricity; how about other forms and ways in which we use energy—will they be easier or harder to transition?

The transport sector: Electric cars are becoming more common. But electric trucks and other heavy vehicles will pose more of a challenge due to the low energy density of battery storage (gasoline stores vastly more energy per kilogram). Ships could use kite sails, but that would only somewhat improve their fuel efficiency; otherwise there is no good replacement for oil in this key transport mode. The situation is similar, though even bleaker, for airplanes. Biofuels have been an energy fiasco, as the European Parliament has now admitted. And the construction of all of our vehicles, and the infrastructure they rely upon (including roads and runways), also depends upon industrial processes that currently require fossil fuels. That brings us to . . .

The industrial sector: Making pig iron—the main ingredient in steel—requires blast furnaces. Making cement requires 100-meter-long kilns that operate at 1500 degrees C. In principle it is possible to produce high heat for these purposes with electricity or giant solar collectors, but nobody does it that way now because it would be much more expensive than burning coal or natural gas. Crucially, current manufacturing processes for building solar panels and wind turbines also depend upon high-temperature industrial processes fueled by oil, coal, and natural gas. Again, alternative ways of producing this heat are feasible in principle—but the result would probably be significantly higher-cost solar and wind power. And there are no demonstration projects to show us just how easy or hard this would be.

The food sector: Nitrogen fertilizer is currently produced cheaply from natural gas; it could be made using solar or wind-sourced electricity, but that would again entail higher costs. Food products—and the chemical inputs to farming—are currently transported long distances using oil, and farm machinery runs on refined petroleum. It would be possible to grow food without chemical inputs and to re-localize food systems, but this would probably require more farm labor and might result in higher-priced food. Consumers would need to eat more seasonally and reduce their consumption of exotic foods.

In short, there are far more challenges associated with the energy transition than opportunities. There are potential solutions to all of the problems we have identified. But most of those solutions involve higher costs or reduced system functionality. Moreover, the energy dynamics of the transition itself will pose a challenge: where will the energy come from to build all the solar panels, wind turbines, batteries, electric blast furnaces, and solar cement kilns that we’ll need? Building the fossil-fueled energy producing-and-consuming infrastructure of the modern world has been by far the greatest construction project in human history. It took over a century, and it’s still a work in progress. Now we’ll have to replace most of this vast infrastructure with something different—different energy generators, different cars, trucks, roads, buildings, and industrial processes, using different materials (no petroleum-based plastics, no asphalt). All of this will take time, money . . . and energy.

And there’s the rub. Where will the energy come from? Realistically, most of it will have to come from fossil fuels—at least in the early-to-middle stages of the transition. And we’ll be using fossil fuels whose economic efficiency is declining due to the depletion of existing stocks of high-quality oil, gas, and coal. Again, this implies higher costs. Why not just use renewables to build renewables? Because it would be slower and even more expensive. Yet the faster we push the energy transition, the more energy will have to be diverted to that gargantuan project, and the less will be available to all the activities we’re already engaged in (running the transport, manufacturing, communications, and health care sectors, among others).

The issues surrounding the renewable energy transition are complicated and technical. And there are far too many of them to be fully addressed in a short article like this. But the preponderance of research literature supports the conclusion that the all-renewable industrial economy of the future will be less mobile and will produce fewer and more expensive goods. The 20th century industrial world was built on fossil fuels—and in some ways it was built for fossil fuels (as anyone who spends time in American suburban communities can attest). High mobility and the capacity for ever-expanding volumes of industrial production were hallmarks of that waning era. The latter decades of the current century will be shaped by entirely different energy sources, and society will be forced to change in profound ways.

That doesn’t have to be a bad thing. The globalized consumer society was always unsustainable anyway, and we might be happier without it. But unless we plan for the post-growth renewable future, existing economic institutions may tend to shatter rather than adapt smoothly.

The fossil fuel and nuclear industries have an understandable interest in disparaging renewable energy, but their days are numbered. We are headed toward a renewable future, whether we plan intelligently for it or not. Clearly, intelligent planning will offer the better path forward. One way to hasten the energy transition is simply to build more wind turbines and solar panels, as many climate scientists recommend.

But equally important to the transition will be our deliberate transformation of the ways we use energy. And that implies a nearly complete rethinking of the economy—both its means and its ends. Growth must no longer be the economy’s goal; rather, we must aim for the satisfaction of basic human needs within a shrinking budget of energy and materials. Meanwhile, to ensure the ongoing buy-in of the public in this vast collaborative project, our economic means must include the promotion of activities that increase human happiness and well being.

Container terminal image via shutterstock.

34 Comments, RSS

  • This article makes perfect sense. I am waiting for the actual numbers from deep analysis. Data, charts, projections, etc. I think the data will really get the discussions and debates going. Most needed are:

    Net energy charts – more low EROEI resources are being added to our current high EROEI resources (that are now in decline). To what effect does this change overall net energy picture. Total oil production can be going up yet the amount of net energy available for economic activity can be going down. Is that the case? If so, what does that look like? How will that look even worse in the future as a higher percentage of unconventional resources are added to the global mix?

    How much net energy is needed to sustain a renewable energy infrastructure? Complex electrical grids need high power semiconductor parts (also, all the computations needed for to balance output to demand), untold miles of wire, workers to maintain and operate these complex systems, electric mining equipment, etc. The supply lines are enormous for the complex technologies we take for granted today. How will this look when everything is powered by renewable energy resources? How will farms generate enough net energy to free up workers for these supply lines? How will they be educated, fed and transported to these jobs?

    As global net energy rides the backside of the fossil fuel bell curve, how much of this declining net energy can be diverted to these very complex and costly renewable energy infrastructure projects when the masses will already be suffering tremendously?

    The numbers are going to really slap people in their faces. The reality is a decline in global population and a return back to the usual situation where only the rich enjoy luxuries while the rest of the popluation is forced to generated the needed net energy for these luxuries.

    fossil fuels resulted in so much low cost net energy that the masses were able to enjoy luxuries. This is an anomaly, not the new normality.

  • Another important factor to consider is the increasing energy and resources that will need to be diverted to disaster relief, as climate disruption brings more super storms, drought, fires, reduced water and food supplies, human and other species die-offs, and so many other ancillary effects. The investment communities in all major industrialized countries have shown their complete recalcitrance regarding “a complete rethinking of the economy” and are doubling down on the failed policies of unfettered growth that can only lead to accelerated (runaway) global heating. “Transformation” would have been a possibility starting in the 1970’s, but now it is just wishful thinking.

  • Amazed there’s no mention of rail as the replacement transport system we’ll need post oil.

  • “The world needs to end its dependence on fossil fuels as quickly as possible. That’s the only sane response to climate change, and to the economic dilemma of declining oil, coal, and gas resource quality and
    increasing extraction costs.”

    When you say “the world” you all know that BRICS will never walk away from fossil fuels up to 2050 because you want want them to. After that period, all bets are off anyway because ageing demographics in the Western world will slow the rate of use down as the population ages, the next generation will not be having as many kids as the abundant carbon/debt fuelers did. Moving into the latter part of the 21st century China, given their 1978 one child policy, will simply lose half of their population, a whopping 700 million will vanish from Earth. When has anything like that happened in recorded history including the black plague? The ME is currently going through major demographic pressures given all the wars they’re experiencing, not certain many babies will be made from this point forth. When nations fight, they don’t have as many children and it seems sectarianism is accelerating as the ME goes through it’s WW1 equivalent.

    Another reason is up to 2050, we’re on track to hit 9-10 billion up from the current 7.3 billion today according to Dr. Hans Rosling, he makes a convincing case. Most of that pop growth will be in developing nations. To try to convince the rest of the world “the parties over” after those in the West had a great time the last 100+ years at the expense of the rest will be seen as an absolute insult. Suspect BRICS see it this way, in fact certain of it judging by moves BRICS are making, not to mention the building up of the Eurasian landmass with huge projects. Post 2050 total global population will start to decline to a more manageble state until some kind of equilibrium is found and unless we make some major technological breakthroughs, this could be our last century anyway in fact many smart scientists seem to think so. Good luck trying to convince India, China, Russia, Africa, Iran et al to stop using fossil fuels because those in the West said so.

    You should look into the fact that by 2050 (only 35 years away) China will start to decline, shedding 700 million from the current 1.4 billion. By that time Japan will have shrunk, much of Europe, probably the Middle East etc.

    “The world needs to end its dependence on fossil fuels as quickly as possible.” Should be “The West needs to first end its dependence on fossil fuels then later the rest of the developing nations.” You have to be very careful when you speak on behalf of the “world” particularly when those voices are Western voices, some may see as hypocritical.

  • What do we do in order to address this problem?

  • 90% of our jobs are #bullshitjobs, systemic and destructive. A cooperative society does not need marketing, lobbyism, tax accounting, real estate brokerage, cashiers, charity, street workers, bankers, etc., etc., … these #bullshitjobs waste most of our energy producing bullshit goods in bullshit companies and providing systemic bullshit services. We would solve all of our energy and climate problems just by getting rid of free market capitalism …

  • stop thinking limited (cost) and start thinking infinite (energy)

  • Indeed, the good thing about wind and solar is that if we are in short of energy, then we can install more zero-emission energy capacity and make e.g. synthetic Jet fuel from surplus production of wind power. If we assume zero cost for surplus electricity, then synthetic Jet fuel is actually cheaper than Fossil oil based Jet fuel.

    The mistake in this article is that it is thinking in terms of fossil fuels and fails to see that wind and solar power are fundamentally different, and they require that the whole energy sector must be redesigned in terms of wind and solar.

    There is added benefit of overengineering renewable energy supply that if we assume zero cost energy, then it also means that it is cheaper to produce food in vertical farms using growth lights rather than to continue current and unsustainable industrial scale agriculture.

    Also today the levelized cost of Tesla batteries is lower than gasoline/Diesel. Therefore I do not see any reasons why it would be difficult to electrify heavy trucking. No-one has just tried to put Tesla batteries to heavy hauling truck.

  • self-driving electric trucks are more affordable to operate than rail. Rail has some limited applications, but mostly there is hard to see any significant growth prospects for rails, becuase the cost of trucking will be reduced drastically by electric self-driving trucks.

  • EROEI is irrelevant with renewable wind and solar power. Only thing what matters with them is the ROI or Return of Investment. EROEI for solar panels could be even less than one. This way we could have solar panel manufacturing plant in Sahara where solar energy is abundant. And then the panels are transported to Europe. This would be equivalent to long distance lossy power transmission lines. If EROEI is less than one, then it means that we are only transporting energy from one location or time to another location or time where energy is more valuable.

    Also power transmission lines and Power To Gas/Liquid processes have EROEI less than one, and still they are making perfect economic sense.

    Also, only net costs that are involved into renewable energy infrastructure are that they are making current grid infrastructure assets worthless. Millions of people will lose their pension savings that are invested into energy utility companies. If we could start building energy infrastructure from scratch, no one would even consider building something else than smart grid with 100 % zero emission energy.

  • Your analysis is correct – your lack of conclusion is mistaken. The reality forward is NewGen nuclear which many very smart scientists and engineers have been saying for years.
    Doubting? Keep reading and check back in a few more years of wasting precious time for our biosphere.

  • So, paint us a picture of your perfect civilization. From now (7.1 billion people) to then. How long would it take to get there, what is the resulting human population number, how many social changes are needed for success (letting go of old cultures and religion, for example), etc.?

  • Now explain to us how we will operate advanced semiconductor fabs without fossil fuels.

    When you get into the details of net energy and the energy intensity of advanced non-biological technology, you start to understand the situation. Humans are powering down and most of our loved technologies are going to be impossible for the masses to afford.

    Don’t worry, the rich will live very nicely, like they have been throughout history.

  • Jouni, you lost me at EROEI is irrelevant. That is simply impossible in our natural world. All activities require energy and thus this ratio could never be irrelevant. If you start to talk about economic models, forms of credit, paper money, financial investments, etc. before you talk about the fundamental driving force for all of these, energy, then you have lost your way towards understanding.

    You often hear the phrase – follow the money. Well, in reality it should be – follow the energy.

  • No, If solar panels were free or as cheap as paper, then EROEI really is irrelevant. Only thing that matter is ROI or how profitable the investment is. EROEI is a concept from fossil fuel era. With zero emission energy sources we can produce thousands of times more energy than we actually need, because there are no resources consumed. Sun will shine billions of your until it gets too dim. It will not go away, even if we cover the entire Sahara with solar panels.

    Besides, today the fundamental driving force is no longer energy, but it is robotics and automation. This is what creates real value.

  • Tesla Motors is right now constructing the biggest factory in the world in Nevada and that Gigafactory will get >100% of its energy needs from wind, solar and small geothermal pilot plant. This wil demonstrate for you that fossil fuels are no longer required. Not because they they pollute, but simply because fossil fuels are more expensive than zero emission renewables.

  • Sorry, your lack of understanding about how energy is used makes it difficult to have a reasonable debate on the topic. let us agree to disagree.

  • It really is meaningless to continue debate with you. Your ideological framework is too obvious and easy to read out.

    You must hate zero emission renewable energy from the bottom of your heart, because zero emission renewable energy destroyes the basis of your ideological framework that is probably based on the scarcity of resources and scarcity of energy and fossil fuels in particular.

  • I have been working with solar systems for over 20 years, even personally designed and installed a full 3 kW system on my house. Now, what were you saying? Never mind. Let us go our separate ways.

  • You’re on the right track!

    Government suppresses progress

    Empires, indeed governments generally, tend to be good
    things at first and bad things the longer they last. First they improve
    society’s ability to flourish by providing central services and removing
    impediments to trade and specialization; thus, even Genghis Khan’s Pax
    Mongolica lubricated Asia’s overland trade by exterminating brigands along the
    Silk Road, thus lowering the cost of oriental goods in European parlours. But
    then, as Peter Turchin argues following the lead of the medieval geographer Ibn
    Khaldun, governments gradually employ more and more ambitious elites who
    capture a greater and greater share of the society’s income by interfering more
    and more in people’s lives as they give themselves more and more rules to
    enforce, until they kill the goose that lays the golden eggs. There is a lesson
    for today. Economists are quick to speak of ‘market failure’, and rightly so,
    but a greater threat comes from ‘government failure’. Because it is a monopoly,
    government brings inefficiency and stagnation to most things it runs;
    government agencies pursue the inflation of their budgets rather than the
    service of their customers; pressure groups form an unholy alliance with
    agencies to extract more money from taxpayers for their members. Yet despite
    all this, most clever people still call for government to run more things and
    assume that if it did so, it would somehow be more perfect, more selfless, next

    Ridley, Matt (2010-06-10). The Rational Optimist
    (P.S.) (p. 182).

  • Population reduction and control is the only viable solution.

  • Rail has potential applications the same way that shipping does – slow, large scale movement of goods between distribution centers. Except over land, instead of by sea.

  • Robots cannot do their jobs, or even move, without energy. Energy is the currency of the Universe, that is an unavoidable fact.

  • I have no data on efficiency vs loss, but creating synthetic jet fuel etc from surplus solar and wind power is a form of “battery storage”. Like old fashioned water towers but more useful.

  • Efficiency is irrelevant because marginal cost of solar and wind power is zero. However, what is important is the production cost of synthetic fuel in euros.

    Synthetic jet fuel production is profitable if there is around 2000 hours worth of zero cost surplus electricity per year. There is about 8500 hours in a year. But this assumes that efficiency is optimized. If allow low efficiency of process, then it is profitable to produce synthetic jet fuel with lower capacity factor.

  • I thought Google X tried vertical farms and failed, but without free energy perhaps it’d be more feasible.

    The Tesla battery, like a lot of other silicon valley alumni products, is widely overhyped. Check it out.

  • Pointing out that something is difficult doesn’t help anything; it’s ironically the easiest thing to do. And just because (s)he doesn’t have an answer doesn’t mean there isn’t one.

  • Zero marginal cost doesn’t mean zero cost, since the fixed cost are still high. Moreover, once you have to store or transform this zero marginal cost energy you incur in costs, so it’s not zero marginal cost anymore.

  • Agree with EVhappy. Saying that EROI<1 is OK is totally nonsense

  • The eroi of power transmission lines is less than 1 and still it makes sense to build power transmission lines.

    This is why only price of power is relevant, not energy consumption. E. G. We have plenty of sunshine in Sahara. Therefore we can make in sahara solar panels from sand and sunlight and transport these to northern Europe, where there is scarcity from energy.

  • Awesome rant about the rot in our current system of living.

  • You got it so right. Man, you are a man after my heart. Bullshit jobs are everywhere. Pointless people doing pointless things, just to make 1% rich whilst 99% become poor. REVOLT I SAY BEFORE IT IS TOO LATE. Do you agree?

  • What about synthetic fuels to replace oil using coal and gas. Both have a less than 1:1 But 130 plants according to one Princeton study could replace all of the oil in 2016 that the USA used. (I am skeptical about this claim.) The problem is that the CO2 emissions would be horrendous. However, Trump doesn’t care about CO2 or climate change and he’s a fan of coal. Future POTUS might be of similar mindsets. We’ll know mid-century when after 2035 the oil companies liquidate their assets. Oil will become dirt cheap, then suddenly out of nowhere almost there must be an oil crash crisis. That will drive these technologies forward. Then we can really fuck up the planet’s atmosphere.

  • Correct. We need to stop sending medical supplies and help to Saudi Arabia, Iraq, Iran, Afghanistan, China, South America, Africa and India. Stop any clean water programmes. Fund euthanasia clinics, death squads, that kind of thing. Don’t be afraid to drop a few nukes on North Korea or Iran. Just sayin’. Don’t bother finding cures for diseases. Stop giving influenza vaccines. That will sort it out. Sell them arms. Oh, we already do that. Actually we already do a lot of these things, it’s called Republican Party policy, but they mostly apply it to America.