Then, a few days later, I read an
article by Paul Krugman (Nobel Laureate in Economics) in the New York Times
(17.04.2014) entitled Climate
Change:Salvation Gets Cheap. Referring to the glad tidings on the cost of
saving the planet coming from the IPCC, Krugman wrote he thinks the climate
threat is solved. He went even further. He wrote: “… there’s no reason we can’t become richer while
reducing our impact on the environment.”
One could perhaps be hopeful
about humanity somehow solving the
climate threat at the last moment. But I think it is impossible that we can all
become richer while reducing our impact on the environment. These are two
different things, though related.
Are the renewable
energies emissions free?
Krugman refers
to a study of the Department of Energy entitled Revolution Now and comments: “That sounds like hyperbole, but you
realize that it isn’t when you learn that the price of solar panels has fallen
more than 75 percent just since 2008.” Let us assume that this particular piece
of information is reliable. But what has that to do with solving the climate
threat? In all cases of industrial production, there are costs, called externalities, that are not borne or not
borne fully by the firms that produce the commodities in question and are
therefore also not passed over to the buyers through higher prices. Atmospheric
and maritime pollution are best examples thereof. Such costs are either not
borne at all, by nobody, or they are socialized, i.e. borne by all members of a
community – a village, a country, a region, neighboring communities, or the whole
world community. As German ecologists say, prices do not tell the whole truth
about costs. Socialized costs may involve some immediate money costs for the
affected community, but it may also be that the future generations would
someday have to bear these costs in some form or other – either as some money
costs (e.g. for repairing the damages done) or as deteriorating health and/or
as environmental destruction of various kinds.
Since in the case of climate
change we are today suffering the negative impact of large-scale
externalization of costs, both past and present, i.e. emission of green house
gases in the atmosphere, it is particularly important to ask whether or not all
the industries involved in the production (or extraction) of the raw materials
and equipments used for producing the renewable energies – solar panels, wind
turbines, rotors, palm oil etc. etc. – themselves emit green house gases into
the atmosphere. There is no doubt that they do, because such industries mostly (if
not wholly) use conventional energy generated by burning fossil fuels.
We also know that in the case of
photovoltaic-solar and wind energy, at the very last stage of production, in
which sunshine and wind are converted directly into electricity, no green house
gas emission takes place. But the process of delivering that electricity to the
consumers again generates green house gases, because copper cables,
Transformers, storage facilities like batteries etc. etc. are produced by
industries that use mostly (if not wholly) conventional energy produced by
burning fossil fuels.
It may be argued that, on the
whole, for producing and delivering a given quantity of electricity, the
renewable energy technologies emit less green house gases than the fossil fuel
burning power plants (because the former do not burn fossil fuels at the last
stage of production). That may or may not be true. I do not know of any
comparative figures on this question. It must be very difficult to work out
reliable figures on this question. But we may get some indication when we
consider the energy cost of production of renewable
energies.
Price versus energy
cost of energy, or the EROEI
Any economist
knows that the price of a commodity
depends on many factors: supply and demand, cost of production, the state of
competition at the relevant markets, normal profit expectation, whether or not
firms producing the commodity are getting subsidies and other favors (e.g. through
protective duty) from their state etc. Cost
of production of a commodity depends largely on the state of technology,
wages and salaries, scale of production, prices of the needed raw materials and
intermediate goods ( such as energy),which in turn depend on all these factors.
But when we talk about production of
energy, then we have to consider another matter. We want light in the evening,
for which we spend energy (in the form of electricity or a flame on an oil
lamp). Light and energy are two different
things. We may be willing to spend any amount of energy to get the desired
intensity of light. But when we want to produce energy by spending energy, then
it would not make any sense if we produce, say, 9 units of energy by spending
10 units of energy.
We also have to differentiate between different forms of energy. In thermal
(or nuclear) power plants, electrical energy is produced by using heat energy
obtained by burning coal, oil or gas (or by splitting atoms). Since we
absolutely need electrical energy for
hundreds of kinds of work – e.g. using a computer – we may be willing to spend
any amount of heat energy to get the
required quantity of electrical energy. We also produce electrical energy by
using the energy of falling water (hydroelectricity). After electrical energy
is produced in these ways, it is delivered to millions of factories, households
etc, where it is used for various kinds of work.
Now comes the point relevant to our present
topic. Factories that produce photovoltaic panels or wind turbines or rotors
use electricity. Even if they need some heat energy for particular steps in the
production process, they generally use electricity to produce that heat. Since photovoltaic
panels, wind turbines etc. produce electrical energy, i.e. the same form of energy that is used to
produce these equipments, they only make sense if they produce in their
lifespan of ca. 15 to 20 years more energy than what is needed to manufacture
them – in other words, if their energy
balance is positive. In our days, one also speaks of EROEI to indicate the
ratio between energy return on energy invested.
There is much uncertainty about the energy
balance (EROEI) of both photovoltaic and wind-turbine technology for producing
electricity. There are people (including myself) who doubt that the energy
balance of photovoltaic technology is at all positive. As for wind energy
technology, these people think that its energy balance is positive (2– ?/1),
but not positive enough to successfully compete with thermal power plants.
These uncertainties and doubts persist
because it is very difficult, possibly even impossible, to work out exact figures on the EROEI of these
technologies. Too many aspects of the studies made to arrive at the currently
known figures had to be based on assumptions and guess work. I have been
reading reports on these studies since about the early 1990s. I found that in
1991, some researchers asserted that, in European climates, the energy pay- back time (EPBT) of
photovoltaic technology – the time it takes for a photovoltaic panel to harvest
the quantity of energy that was invested in manufacturing it – was 1.2 to 2.1
years. These figures were by and large comparable to those of large-scale
thermal and nuclear power plants; i.e. they were ostensibly already then
competitive. But in 1995 – after four years of further research and development
– another researcher stated that this figure (i.e. EPBT of photovoltaic panels
in European climates) was 9 years. Similarly, while a study made in 1984 found
that the EROEI of photovoltaic technology was 1.7/1 to 10/1 (obviously in
different areas), another study ascertained in 1996 that it was 0.41/1 (that
is, negative). The latest figure I have is from an article written by Ted
Trainer (in April 2014), who too has been studying this matter since long. He
writes cautiously: “… several recent studies have found that when all relevant
factors are included, the ratio of energy produced by a PV[photovoltaic] module
in its lifetime to the energy needed to produce it is not 10/1 as is commonly
thought, or 60/1 as some advocates have claimed, but probably between 4/1 and
2.4/1.” (EROEI and EPBT figures are from Sarkar 1999:
chapter 4; Heinberg 2003: 152f., Trainer 2014)
These results are inexact not only because
they had to be largely based on guesswork and many assumptions, but probably also
because the researchers did not use the same methodology. Also time (relevant
for technological development) and place (relevant for quantity and intensity
of sunshine) of the studies varied. In such a situation, I think it is
permissible to apply logic and common sense in order to get an approximately true
picture of the prospects and promises of renewable energies. Then one can’t
help asking a few questions:
If solar panels have become so cheap since
2008, why do energy companies still insist on building new coal- or oil-fired
thermal power plants? And why do oil companies are still searching for oil at
enormous costs deep under the ocean bed in the Atlantic or the Arctic Ocean? Why
does the Japanese government want to recommission the nuclear power plants that
had been shut down in the wake of the Fukushima catastrophe? Why hasn’t India,
which is very rich in sunshine and wind and has a long coastline, yet decided
to bid farewell to conventional coal and uranium based power technologies? Why
is it still paying every year a huge oil import bill? And why must renewable
electricity producers of Germany still demand and enjoy the privilege of
guaranteed sale and guaranteed prices that are much higher than the prices of
conventionally produced electricity? Obviously, renewable energy technologies
cannot yet compete with conventional energies.
Prospects for renewable
energies
But will they
soon be able to outcompete the conventional energy technologies? Or can they in
near future make the latter superfluous and supply all the energy needs of our
industrial societies? I think the prospects are negative. We know that easily
accessible and easily exploitable sources of raw materials, particularly those
of conventional fossil fuels, are getting exhausted and new finds are unable to
compensate for the exhausted quantities. The geographical and geological conditions under which these resources are being found and
exploited are progressively worsening. We cannot change them. Think of extracting
oil from the bottom of the Arctic Ocean! As a result, more and more energy has
to be invested for extracting raw materials – coal, oil, gas, uranium, metal
ores, rare earths etc. That means, their energy
cost of production (also partly reflected in their financial costs) is
steadily rising. Now it is exactly with such raw materials that all the
equipments of all renewable energy industries –solar and wind power plants as
well as bio fuel factories – are built. That means, the energy investment required for building such power plants is
continuously rising. But the average energy content of sunshine and the fact
that the sun does not shine in the night are cosmological constants. Climate
scientists are predicting (and we are noticing it already) that, with climate
change, wind velocity during storms will strongly rise. But that will be of
little use to wind power plants, because in such cases the generators must be
shut off. Such being the facts, the EROEI of renewable energy technologies
cannot rise in future. It will rather go down – in spite of small technological
developments that might still take place. Miracles do not happen.
But one question still remains: How come prices of solar panels
have sharply fallen? As stated above, prices of commodities depend on several
factors. In the case of solar panels, it is well known that the main cause of
the drop-off in price is that Chinese producers have entered the world market
in a big way. They haven’t achieved any technological breakthrough. But their
wages are much lower than those in Europe and America, they have less
environmental and other conditions imposed on them, and the state is granting them
subsidies and other favors. What is more, they are offering their products at
dumping prices. The five or six German producers that recently went bankrupt
and those that are threatened with bankruptcy, give these reasons for their
misery. They complained to the European Commission and asked it to impose
restrictions on Chinese exports of the product to Europe. The case ended with a
compromise, but that did not help the German companies that were already
bankrupt. Another explanation for the drop in prices is the enlargement of the
scale of production, which was made possible by the promotional measures taken
by states in the rich countries.
I think the
dispute will be settled in the next ten years through facts on the ground.
"In the meantime also renewable energy enthusiasts concede", writes a
Green Party intellectual, "that one cannot reckon with permanently
profitable solar electricity production north of the Mediterranean Sea (Wiesenthal
2013: 29).
The difference between
“feasible” and “viable”
“But”, renewable energy enthusiasts ask me, “why
do you altogether rule out that one day industrial societies will succeed in
fully replacing non-renewable energies with renewable ones?” Of course, in principle, that too can happen. The
future is in principle always uncertain. But we have to begin to act today in order to prevent foreseeable catastrophes
in not all too distant future. That means, we have to act on the basis of less
than 100 percent certain knowledge. In order to act effectively, we must then know,
or try to infer from known facts, what is probable
and what not. I think it is improbable that even the best renewable energy
technologies of the future will someday be able to supply the whole energy
needs of industrial societies.
If we could be satisfied with light from
oil lamps and do all work using only manual and animal labor power plus heat
energy from burning wood, then our economy could be fully based on renewable
energy. But that would not be an industrial economy, which cannot function without
electricity and liquid or gaseous fuel. To get all of these latter forms of
energy from sunshine or wind is not possible. A law of nature, the entropy law,
stands in the way.
Sun’s energy reaches us in a high entropy
state, i.e. in a highly dissipated form. That is sufficient for agriculture and
plant growth, from which we can get wood for fire. But for producing
electricity we have to concentrate a large quantity of highly dissipated sunshine
with the help of photovoltaic panels or aluminum mirrors. Production of these
equipments themselves consume a large amount of concentrated, i.e. low entropy
energy that we mostly get from fossil fuels found in nature. That means we can
use this method of producing electricity only as long as sufficient quantities
of easily extractable fossil fuels (or uranium) are available. That is why
Nicholas Georgescu-Roegen (1978) called solar electricity technologies parasites.
It is more or less so also with wind energy. That means, solar electricity
technologies are feasible but not viable. They would only be viable, if the
second generation of renewable power plants, i.e. all the needed equipments from
A to Z – solar panels, aluminum mirrors, wind turbines, factories, roads,
vehicles etc. etc.etc. – could be built/manufactured with solar or wind energy only.
That would not be possible if the EROEI of (net energy produced by) solar and
wind energy technologies remain so low as it is today. If we assume, as Ted
Trainer writes, that the EROEI of solar panels is 2/1, then, after we have consumed
this energy for our daily living and the other usual activities, no surplus would
be left for investing in the production of the second generation of solar power
plants. Trainer writes: “Estimates in the literature are that the ratio [EROEI]
must be at least 7/1 for a technology to be viable.” It is very improbable that
that would be the case in future, because, as I have argued above, the trend is
pointing in the opposite direction.
This problem cannot be solved even if we
try to use the enormous quantity of high intensity sunshine available in the
deserts of the earth. One such project, the Desertec
project of some of the biggest European corporations, is today on its deathbed.
Conclusion
Today, in Germany,
the result of years of promoting renewable energy technologies through subsidies
(collected from the consumers including smaller businesses) and other favors is
that electricity price has increased so much that tens of thousands of poor
Germans cannot pay their electricity bills and are getting their grid
connection cut off (coal price rises have also contributed something to it).
The present federal government is therefore trying to arrest this extraordinary
price rise by reducing to some extent the guaranteed subsidized prices paid to
the producers of renewable energies. So we see that even the so-called
“Energiewende” (energy-system-change) of the Germans aimed at reducing the
emission of greenhouse gases is faltering, and the government is being
criticized by pseudo-environmentalists for putting on the brakes against it.
Krugman thinks we can all become richer while reducing our impact on the environment. This is also the mantra of
many other pseudo-greens and pseudo-environmentalists all over the world, who
propagate illusions of green growth, sustainable growth, green New Deal etc.
etc. Edenhofer, the IPCC man, naively assumes in the midst of a stagnation-crisis
that the world economy would regularly grow at a yearly rate of two percent (Süddeutsche Zeitung, 14.04.2014). But Krugman,
the star economist, ought to have known better than to persistently demand policies for pushing economic
growth. He argues: “Other things equal, more G.D.P. tends to mean more
pollution. What transformed China into the world’s largest emitter of
greenhouse gases? Explosive economic growth. But other things don’t have to be
equal. There’s no necessary one-to-one relationship between growth and
pollution.” That’s right. But other things can also become worse than before,
so that the environment can also be destroyed without economic growth. Even at
zero percent rate of growth an industrial economy continues its work of
polluting and degrading the environment.
The environment is more than just
the climate, which Krugman thinks can be saved by substituting renewable
energies for conventional energies. And the environmental crisis is a much
bigger matter than the climate crisis. It includes, apart from the state of the
climate, also the state of the oceans, the rivers, agricultural lands, forests,
biodiversity and many other things. Krugman does not seem to know that if we all
are to become richer, that will require much more than installing more solar
panels and wind turbines. That will require extracting more fossil fuels, more
mineral ores, building more dams, more factories, more roads, more houses, more
stadia, more cars, more airplanes and so on. That will give the environment the
final death blow. We shall then see that one cannot eat money.
My hope is that it – all getting
richer – will not be possible any more. For not only has oil extraction reached
its peak, but also the other resources are getting depleted very fast. I
recently saw a documentary film that shows that even the most ordinary resource
sand has become so scarce that it is being stolen. For big building projects
even sand on the seabed is being excavated, as a result of which the strands
are vanishing under the water. Actually, we should
be talking about preparing ourselves for a frugal lifestyle.
Maybe we should be preparing ourselves for
much worse things. Recently, a team of American scientists carried out a
research project to ascertain the conditions that led to the collapse of past
human civilizations. The project was partly funded by NASA, the organization
whose purpose was to put man on the moon. The scientists concluded that there
are strong indications that our present civilization is headed for collapse(Ahmed
2014).
Literature
Ahmed, Nafeez (Dr.) (2014) “Nasa-Funded Study: Industrial Civilisation Headed
For 'Irreversible Collapse'?” in: www.the
guardian.com/environment/earth-insight (14.03.2014).
Heinberg, Richard
(2003) The Party’s Over. Forest Row:
Clairview.
Sarkar, Saral (1999) Eco-Socialism or Eco-Capitalism? A Critical
Analysis of Humanity’s Fundamental Choices. London: Zed Books.
Trainer, Ted
(2014) Relax! Solar energy can save us.
Krugman says so. (unpublished
article).
Wiesenthal, Helmut (2013) ''Der Solarstrom – Lackmustest grüner
Energiepolitik', in Böll Thema – Es
grünt, Berlin, Nr. 1.
