My article for National Review:
If you judge by the images used to illustrate reports about energy, the world now runs mainly on wind and solar power. It comes as a shock to look up the numbers. In 2019 wind and solar between them supplied just 1.5 percent of the world’s energy consumption. Hydro supplied 2.6 percent, nuclear 1.7 percent, and all the rest — 94 percent — came from burning things: coal, oil, gas, wood, and biofuels.
As Mark Twain might say, reports of an energy transition away from combustion as a source of energy are greatly exaggerated. True, carbon-dioxide emissions are rising more slowly than energy consumption, but that is mainly because gas is displacing coal. The rise of renewables has so far not even compensated for the recent decline of nuclear — a decline renewables have contributed to causing because intermittent renewable energy hits the profitability of nuclear power hardest. Nuclear cannot be easily switched on and off.
So the thermodynamic explanation of the world economy remains the same as it has since the industrial revolution liberated us from reliance mainly on the (renewable) muscles of people, horses, and oxen or the vagaries of (renewable) trade winds. We use the heat of flames to do useful things, such as move stuff around, light and heat our homes, manufacture goods, grow crops with tractors, power the Internet.
The main change in recent years has been that energy is increasingly centrally planned. Instead of a market deciding between fuels, the government picks favorites to subsidize, and then subsidizes the old ones, too, when it finds it has poisoned the market against them. Throughout the Western world energy markets are coerced. The development pipeline, corporate rhetoric, and fuel-market shares are all determined by policy.
This has some perverse consequences. Lobbied by firms such as General Electric, Sylvania, and Philips, governments all over the world forced consumers to give up incandescent light bulbs in favor of expensive compact fluorescent bulbs, ostensibly to save energy. All this achieved was a delay in the voluntary replacement of both by a much more efficient, safe, and reliable form of lighting: LEDs.
The world needs energy innovation if it is to reduce the use of fossil fuels, as almost every politician now demands. But things such as electric cars merely displace the flame from engine to power station. Whether that reduces emissions at all depends on how much of the electricity comes from coal, gas or other sources, on how much energy is used to make the battery, and how long the battery lasts. Under even the most optimistic assumptions, the emissions reductions are small. And although the efficiency of energy consumption is improving, it cannot solve the problem. First, many people in developing countries are still without electricity or transport fuel. Energy demand will increase as their incomes grow. Second, as the economist William Stanley Jevons pointed out in 1865, if you make coal (or light or flight) cheaper, people use more of it. Efficiency gains increase demand.
It is in the generation, not the consumption, of energy that innovation is needed. Here there is another obstacle. History shows that you cannot demand a particular innovation and expect it to turn up, however generous the incentives you offer. If you could, then the supersonic planes, routine space travel, and personal jetpacks we were promised in the 1950s would have long since arrived. Instead we have been using 747s for 50 years: We ran out of big innovations in transport.
For almost as long we have been asking inventors to find a way of generating cheap, reliable, and safe energy without producing carbon-dioxide. Frankly, it is now clear that renewables cannot do it. They tap low-density energy sources, so they need a lot of space. No amount of innovation will alter that constraint. There are not enough rivers to dam, tidal basins to barrage, or hills to festoon with wind turbines, at least not without destroying too much nature. It takes 150 tons of coal to make a wind turbine, and two tons of rare-earth metals. (Governments and market hucksters insist that wind energy is now cheap. Audited accounts of the firms that build wind farms reveal that this is untrue.)
There is enough desert space for the solar panels we would need — in the Sahara mainly — but the cost of getting it to where the energy is used, and storing it for use during the night or turning it into jet fuel, remains astronomical, however fast the cost of solar panels themselves falls. As for waves, or ground-source heat pumps, or geothermal energy, they remain niche opportunities with little prospect of denting demand for oil and gas.
Nuclear power could supply all our needs from a comparatively tiny footprint of land and steel, but we have made innovation in nuclear all but impossible by massively increasing the cost and time required to license a new design. So we stick with an old and inefficient design that uses water coolant and solid fuel, while distorted energy markets leave the nuclear industry begging for subsidies equivalent to those received by the renewables industry. Molten-salt reactors will one day be more efficient, safer, and cheaper, but only if there is a revolution in regulation as much as one in technology. Keep your eye on Canada, which is trying to achieve this.
Fusion energy is another innovation we promised but failed to deliver. In theory a small quantity of heavy water (containing deuterium) and lithium (to make tritium) could power a town, if the atoms could be induced to fuse. It works in H-bombs. But doing this in a controlled way has proved elusive for half a century. There is renewed hope, however, that low-temperature superconductors and “spherical tokamak” designs may yet crack the problem of controlled fusion and that by 2040 we will have abundant, cheap, reliable energy on tap.
If that were to happen, through molten-salt fission or through fusion, imagine what we could do. We could synthesize fuel for transport, dismantle wind turbines and oil pipelines, stop burning trees in power stations, desalinate enough water to supply the human race without touching wild rivers, and suck carbon-dioxide out of the air. Above all, we could raise the standard of living of the poorest on the planet. It is surely worth a try.
Meanwhile, here is a worrying trend. Energy consumption in the West is stalling and in some sectors, such as electricity, falling sharply. No one really believes that efficiency accounts for all of that. What is going on?
In effect, the West has outsourced its energy consumption to China. Xi Jinping’s announcement in September that China will be carbon-neutral by 2060 was merely a cheap headline-grabber. In the same speech he announced that China’s emissions will rise until 2030 and, implicitly, remain high for quite some time thereafter. It’s 30 years from 2030 to 2060. That was news.
China will hoover up and employ as much of the world’s fossil fuels as possible in the next few decades. Naïve divestment campaigns will simply play into Chinese hands. If Harvard sells its fossil investments, someone will buy them. Who?
With the wealth created from cheap coal, oil, and gas, China will then head for nuclear. Along with Russia, China has been involved in two-thirds of global nuclear development in the last 20 years. The future of energy thus depends on whether the West wakes up to the need to do the same or persists in its renewables folly until it is too late to change course.
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