Is Green Energy Economically Viable?

Acknowledgement: The following relies heavily on work by Leigh Goehring and Adam Rozencwajg, “The Distortions of Cheap Energy” Fourth Quarter 2021
February 23, 2022

It seems axiomatic among right thinking people that green energy must be fervently supported. Green energy interests – people who want to populate the landscape with windmills and solar farms as far as the eye can see – tell us that green energy eventually will be cost competitive with fossil fuels and a boon to the global economy. There is abundant evidence, however, that the opposite is closer to the truth. Green enthusiasts owe it to themselves and the public to study the facts and logic of competing narratives before making up their minds.

The surplus energy available from wind and solar does not now nor will it ever be sufficient to support an advanced technological civilization. It takes energy to get energy. The more of the total energy produced that is needed to produce it in the first place, the less is the energy available to do things people want — move things and create heat.

Surplus energy is measured by comparing the energy available to do work to the energy required to generate that usable energy; the technical term for this idea is energy return on energy investment (EROEI). For example, the EROEI for natural gas (30:1) would be the energy available from a natural gas-fired electricity generation plant divided by the total amount of energy needed to access the gas, build the plant,  and convert the gas to electricity.

The EROEI from the time of Christ to the mid-17th century was about 5:1. During that period, population growth and per capita economic growth were nil. It took so much energy to produce usable energy that the amount left over was barely enough to enable people to feed themselves and provide for other basic necessities. Food and basics require about 14 gigajoules (GJ) per capita (a joule is a measure of energy). It was not until mankind learned to extract energy from fossil fuels with their high EROEIs  that population and economic growth began to accelerate rapidly.

What would happen today if the nations of the world switched from fossil fuels to “renewable” energy from wind and solar? Their EROEIs are 15 and 3.5 (after allowing for intermittency and redundancy), respectively? Total energy production as of 2019 was ~75GJ. Since fossil fuels still are by far the predominant source of energy, the EROEI is about 15. Thus, it takes 5GJ of energy to produce 75GJ of usable energy (75/15). After the energy used to produce energy, along with food and other basics are accounted for, there remains an energy surplus of 56 GJ (75-5-14).

With an EROEI of 3.5, a bit more than 21GJ of total energy production would be needed to produce 75GJ of energy (75/3.5); net of food and other necessities, the global population would have surplus energy of 40 GJ (75-21-14), a decline of almost 29% (56-40)/56. Poor nations would be condemned to eternal poverty and rich nations would experience a precipitous decline in their standard of living.

Here’s the key point to remember about wind and solar energy production: it is extraordinarily material and capital-intensive. For example, a one megawatt wind turbine requires:

40 tons of steel and 600 tons of concrete for the foundation

150 tons of steel for the tower

9 tons of copper for the generator

45 tons of steel for the nacelle

15 tons of carbon fiber for the rotors

Doesn’t the decline in wind and solar cost per kilowatt hour (kwh) mean that EROEI will improve dramatically over time, driven by scale and improvements in technology? After all, from 2010 through 2020 the cost of electricity from solar has dropped 33 cents per kwh from 40 to 7, and wind costs have fallen from 9 cents per kwh to 5.

A close look at why costs have declined yields a far less optimistic conclusion. 20-25 cents of the reduction in solar costs came from lower energy prices, lower, capital costs, and a resolution of one-time distortions in the markets for polysilicon, a key ingredient in the fabrication of solar panels. Similarly lower energy and capital costs contributed at least 50-70% of the decline in the per kwh hour cost of power from windmills. Since 2020, the cost of fossil fuels and interest rates have risen strongly.

Scale and technology are not likely to make wind and solar viable. Their capital and energy intensity preclude that.  The energy that windmills and solar panels access  is so diffuse that it always will take a massive amount of material  to catch it. It will always be uneconomic.

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I strongly welcome comments, but  ask you to abide by the principle, “Always respect the person, never respect the idea.”  A thoughtful analysis of why the views  I present are wrong helps all of us get closer to discerning what is true, but civility must rule.



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