Scheer Solar Economy Renewable Energy for a Sustainable Global Future (Earthscan, 2005)
.pdf152 THE PATHOLOGICAL POLITICS OF FOSSIL RESOURCES
facto subsidized by their customers, a position they can use to beat off new entrants who, because of the high initial investment costs, cannot match sinking electricity prices. Even within a market that is officially free and open, the large electricity companies can still maintain and even extend their position by using dumping prices to fend off new entrants to the market. The free market for electricity is dominated by oligopolistic competition between large firms. As long as the traditional excess capacity of these firms allows them to forgo new investment, prices can continue to fall. But as soon as this phase is over and the process of monopolization is further advanced, the need for additional investment alone will bring large price increases. The aim is to head off competition from new entrants and municipal power companies before this point is reached. The scale of consumer subsidy of electricity companies was revealed during the discussion on ‘stranded investments’ following the opening of the electricity market. The term ‘stranded investments’ refers to investments undertaken regardless of actual demand. The total value of such stranded investments was estimated at $50 billion in the USA alone.18 The electricity companies’ attempts to disguise this overinvestment by seeking to persuade governments to underwrite sales – for example, in the case of electricity from lignite-fired power stations in the former East Germany – expose the bankruptcy of their business model. Such legal protection is accepted as a matter of course in the established electricity industry, but not for renewable energy or for municipal power companies.
One might object that the tide of subsidy for nuclear and fossil fuel energy does not wash equally highly in all countries, and that the existence of subsidies alone is insufficient to disprove the argument that fossil energy is fundamentally more cost-effective than renewable energy. But as the analysis of conventional energy supply chains in Part I indicates, only the sheer scale of production and subsidy makes it possible to absorb and disguise the innumerable cost-centres of fossil fuel and nuclear energy. The larger the quantity of subsidized energy supplied locally, the lower the global price, wherever the energy is consumed. The lower the price, the greater the flow of energy. Wherever energy production and supply is subsidized locally,
THE MYTHOLOGY OF FOSSIL ENERGY 153
the subsidies paid reduce the costs of fossil fuels globally. If all subsidies were to be withdrawn, the resulting price hike would perhaps make state support for renewable energy unnecessary. The unilateral removal of subsidies by one country alone, however, would not be enough to overcome the lead enjoyed by conventional energy. Only the lack of accounting transparency in global commodity supply chains allows the myth of the lower cost of fossil fuel energy to be preserved.
The feigned productivity of nuclear and fossil energy
Businesses seek productivity growth for a number of reasons, of which price competition, whereby high costs may cause a business to be out-competed by more productive rivals, is only one. Other motivations include the quest for increased profitability and ways to make tasks easier and simpler to perform, greater user-friendliness for a more competitive product, reduced environmental impact and time savings. Which of these motives dominates will depend on the particular conditions obtaining. While energy was still expensive, efforts to increase productivity concentrated on energy efficiency. Since human labour has become expensive, the focus has been on automation.
Disproportionately low conventional energy prices are most frequently cited as the reason for highly suboptimal energy productivity, but there are other reasons as well. There is the purely ideologically motivated fixation of the business world on current prices, as befits the neoliberal mentality of microeconomic calculation. Furthermore, the concentration of the search for productivity gains on technological solutions is extremely short-sighted, because it fails to address wider questions of the relationship between energy and society.
The fixation with current prices
In this supposedly modern age, the sole criterion for evaluating the viability of a particular source of energy is almost
154 THE PATHOLOGICAL POLITICS OF FOSSIL RESOURCES
invariably its market price. Market prices are assumed to reflect current costs, and indeed the two terms are used more or less interchangeably. That, however, is an anachronistic analysis of economic viability. Cost and price are by no means identical. The whole history of economic development since the Industrial Revolution shows that, time after time, increases in productivity with the aid of judicious use of energy and efficient generation technologies have made it possible to reduce energy costs despite stable or even rising prices. Equally, the extremely low energy duty in the USA, among other things, has given the country the lowest energy prices in the OECD, but by no means does that automatically translate into lower energy costs for households or industry. Low prices encourage markedly higher energy consumption and provide no incentive for investment in energy efficiency. No wonder that US citizens consume two to three times as much fuel and electricity per head, effectively negating all price advantages.19
Equating – or confusing – prices with costs is an argument from the pre-technological age, and an expression of structural conservatism. Nevertheless, this is the argument that dominates the energy debate. Any mooted increase in energy taxation is subjected to a barrage of criticism, on the grounds that the consequent energy price rises must necessarily mean equivalently higher costs, which in turn would endanger the economy’s international competitiveness. The immediate response in those countries which have instituted environmentally motivated duties on energy, be it Germany, the Netherlands or Denmark, is to grant exceptions for energy-intensive industries – despite the fact that there is much to suggest that it is precisely in industries with above-average energy demands that the greatest scope for efficiency gains lies. This obstructive attitude towards energy price rises permeates even international comparisons of energy costs, which in fact do no more than simply compare prices. Such comparisons reveal little information about the economies compared. In order to account for productivity differences, it would be more germane to compare the proportion of costs attributable to energy in private households and comparable manufacturing and service industries. The absence of such statistics results in systematic errors of judgement both
THE MYTHOLOGY OF FOSSIL ENERGY 155
in energy policy and within industry, errors which bind society to conventional energy and make the discussion of vital fundamental change taboo.
The low productivity of centralized energy supplies
The analysis of global energy supply chains presented in Chapter 1 will have made clear that while nuclear and fossil fuel energy supplies can be managed more effectively, they can never be truly productive. Conventional efficiency calculations, of course, make no mention of this. In the case of electricity supplies, only the input/output efficiency of the generation process is considered. No account is taken of energy losses over the whole supply chain, or of losses during the construction of drilling rigs, ports, pipelines and power stations.
Yet the structural productivity gap of centralized energy systems goes deeper still. For example, the nominal generative efficiency of a large power station applies only if current is actually being produced from the fuel consumed, which is not always the case. Power stations have to cope with fluctuations in demand which can never be accurately predicted, so there must always be steam on tap to drive the turbines – which means that fuel must be burnt even when demand is low. If demand falls, the steam must be vented. Depending on the actual load on the power station, further energy losses are thus inevitable. Steam turbine power stations can achieve their optimum efficiency only if demand remains constant, which is why base-load electricity is the cheapest. Underutilized capacity and superfluous fuel consumption are corollaries of large-scale power plants.
Local micropower plant does not suffer from these problems. If small motor-driven generators, which can be switched on and off in seconds, are used in pace of large steam turbine plants, then there is no need to maintain heads of steam behind turbines, and no need for reserve capacity. Small power units, typical for most forms of renewable energy, make for a modular system that can be tailored to meet market demand à la carte. There is much less risk of misplaced investment. Every module is independent, and short lead times make it possible
156 THE PATHOLOGICAL POLITICS OF FOSSIL RESOURCES
to react quickly to increased demand. Investment returns kick in immediately.
Looking for environmental efficiency in isolation
Environmental considerations are also used to argue against a swift re-prioritization in favour of renewable energy. Environmental gains, it is claimed, can be achieved more quickly by saving energy or using fossil fuels more efficiently than by costly investments in renewable energy. At first glance, this argument seems convincing, and it can no doubt be backed up by calculations in many cases. Nevertheless, to apply it generally would be at least questionable, if not outright absurd. The environmental efficiency of investment in renewable energy is in many cases comparable with investment in energy efficiency. That is the case, for example, with the ‘passive’ use of solar energy in buildings. Even the German environment ministry20 has frequently brought up energy efficiency as an argument against the use of vegetable oil as fuel, preferring to aim for the introduction of fuel-efficient vehicles (the so-called ‘three-litre car’). This overlooks the fact that motors which run on vegetable oil can be just as fuel-efficient as diesel or petrol engines. Fuel efficiency as an argument against vegetableoil fuel simply prioritizes fossil fuels over renewable energy, which is environmental nonsense. Even for PV, still the most expensive solar technology, there are cases where the environmental cost-effectiveness argument no longer applies. Where they make the construction of distribution grids and cabling unnecessary, PV installations are already often more cost-effec- tive than all forms of conventional energy. Arguing against the exploitation of renewable energy on energy efficiency grounds is irresponsible environmental and development policy. Whether it is more appropriate to invest in more efficient use of fossil fuel energy or in renewable energy, or in both, will depend on the specifics of the case in question.
Even where more efficient use of fossil fuels will bring greater immediate environmental returns, one must then ask whether this is still the case once the entire life-cycle of the technology has been taken into account. It is not enough simply
THE MYTHOLOGY OF FOSSIL ENERGY 157
to compare the current cost of investing in fossil fuel or solar plant; the running cost of fuel for the more efficient fossil fuel plant must be compared with the zero input costs of a solar installation. In any case, there is a limit to how efficient fossil fuel plant can be. As a rule, the marginal cost of efficiency improvements increases with each additional saving, whereas the price of renewable energy technology falls with increasing market penetration. The decisive factor in the economic analysis is the direction of the cost trend. This must be taken into account when extrapolating into the future.
In a society composed of independent economic agents, it also makes no sense to assume that the cost–benefit analysis in terms of safeguarding climate and environment will always favour investment in energy efficiency. What are farmers wishing to reclaim their agricultural waste using a biogas plant, or to erect a windfarm on their fields, to make of such a blanket generalization? Or householders who, having exhausted all the energy efficiency options open to them, now want to generate their own electricity from PV? Are they supposed to forgo investing in a project with which they identify and which is within their power to realize, in favour of some anonymous investment in more efficient use of fossil fuels? If the argument that greater energy efficiency brings greater environmental benefits were to be followed to its logical conclusion, there would need to be a central bureau for all energy investment, whose responsibility would be to allocate available capital to the most effective investment. That may sound like a crude caricature, but the conclusion is implicit in the efficiency dogma of some studies. Economic trends require a variety of motivations; reducing all motives to the level of unconditional cost–benefit calculations stifles individual dynamism and promotes conformity.
The received wisdom of fossil fuel economics seeks to trump every renewable energy initiative by asking whether it ‘pays’. But how much of human activity would cease were this to be the sole criterion for spending money? From house and flat décor to sunny holidays abroad, from eating out to stylish cars – whether any of these are worthwhile is down to individual taste and priorities. Clean energy is an emotional and ethical
158 THE PATHOLOGICAL POLITICS OF FOSSIL RESOURCES
need as well as a rational one. Relativizing this need by reference to up-front costs is a mistake that even proponents of environment-friendly energy can be persuaded to make. Energy is not a special case; there is no reason why consumers should treat it other than they would any other commodity or good. Equally, there is no reason why energy supply should remain the preserve of the established energy industry alone.
The fundamental inefficiency of fossil fuels
The sun is the ultimate origin of all known energy sources. Oil, gas and coal are derivatives of biomass produced by the sun over a period of around a billion years. Geological processes such as pressure and the exclusion of air converted this biomass into the form that is extracted and burnt today. However, as only a few millionths of the original biomass were converted into coal, oil and gas, only 0.000011 per cent is available today as a source of energy. By comparison, once biomass harvested today has been dried, its energy content is available in full.
Such considerations are more than purely theoretical. The logic is that of the national accounts, in which an increase in the money supply is equated to growth. Everybody acts as if reserves of fossil fuel and the Earth’s capacity to absorb waste and emissions from power generation were unlimited. This is no formula for growth, but rather a twofold loss, of resources on the one hand and environmental quality on the other. Because nature is not an accountant and sends no invoices, the incalculably high cost of consuming fossil fuels is overlooked. Fossil fuels necessarily represent a departure from the variety and multifunctionality of their solar origins. The broad spectrum of solar irradiation, from ultraviolet to infrared, can be put to a variety of different uses, from light for the production of electricity to the use of infrared radiation for heating. By circulating a thin film of water over its sunny side, a solar cell can also be made to serve as a solar collector, raising its efficiency from the current 10–15 per cent to 50 per cent or more. As these ‘sunlight harvesters’ can take the form of building components for roofs, facades or windows, for fences or balconies, they can be made to serve far more functions than
THE MYTHOLOGY OF FOSSIL ENERGY 159
has hitherto been the case. The wide variety of ways in which wholly new solar energy systems can be used gives rise to a completely different set of efficiency calculations.
The scale of what can be achieved can be seen in nature. A single tree absorbs CO2, produces oxygen, prevents evaporation and serves as a reserve of resources and energy; it can produce food, serve as a wind break or protect against erosion –while also being nice to look at. Only solar resources can achieve such multifunctional efficiency. Nature sets the standard for the technological and economic realization of the potential of solar resources discussed in Part III.
Ideology and the physics of energy
Most physicists to this day regard the achievable potential of renewable energy as insufficient and of little use. They believe that it is impossible to replace all existing fossil fuel and nuclear energy supplies, arguing that fossil or nuclear energy must be available to cover for when the sun does not shine or the wind does not blow. They do not appear to have hit on the simple notion that it is also possible to use renewable energy to cover for interruptions in supply. It is in any case already common practice to take capacity onand off-line to suit varying levels of demand, even if for different reasons. The claim that the base load cannot be met from renewable sources has also long since been empirically debunked.21 The question is why these arguments stubbornly continue to circulate, even among physicists and the wider scientific community. Even politicians with only the most rudimentary understanding of physics point to the ‘laws of physics’ when criticizing supposedly overblown expectations for renewable energy, a tactic designed to lend weak arguments the air of scientific profundity.
Physicists’ opinions are shaped not just by physical laws, but also by the received wisdom of the time. Armin Witt introduces his book on suppressed inventions with the ironic observation that ‘our physical laws say that the bumblebee cannot fly – but nobody told the bumblebee.’22 One familiar argument against the achievability of meeting all human energy needs from solar energy sources is their low energy density. The
160 THE PATHOLOGICAL POLITICS OF FOSSIL RESOURCES
term refers to two concepts: energy content per unit mass on the one hand, and the geographical footprint on the other. One cannot conclude on the basis that one tonne of crude oil or coal contains more energy than one tonne of biomass that it is not possible or not feasible to generate energy from biomass. It simply means that biomass is more costly to transport, and that shipping distances must therefore be kept short. The geographical concentration of large fossil or nuclear energy flows in large-scale power plants is by no means essential in order to meet mass demand. Whether the electricity ‘pool’, in the form of the potential maintained in the distribution grid, is ‘filled’ from a few large power plants or numerous small ones is immaterial as far as the electricity consumer is concerned.
The size of the grid is equally unimportant. Whether international or national, regional or local, the only thing that matters is that enough electricity is pumped in to meet current demand. The impression given by comparisons between the footprints of the various generation technologies is thus highly misleading. In Germany, the figures are 0.1 kW/m2 for PV, 3 kW/m2 for wind power, 500 kW/m2 for coal and 650 kW/m2 for nuclear power. Statistics like this are designed to create the impression that large-scale electricity generation requires largescale power plants capable of producing large quantities of electricity in a very small space. The figures for coal and nuclear power, however, fail to account for the land requirements of the entire supply chain from primary energy extraction to the power station, electricity distribution and waste disposal. Arguments based on energy density are no more than energy prejudice dressed up as physical fact.
All that relative energy density tells us is which structures are required to support the various generation technologies. High energy density generally means centralized structures; low energy density, decentralized ones.23 Those who accept the need for high energy density lack the motivation or technical imagination to envisage anything other than large-scale production. Why is it that even intelligent physicists venture out on such thin ice? Why do some many of them actively reinforce the mythology of centralized nuclear and fossil energy supplies? Why do respected physicists and even the venerable German
THE MYTHOLOGY OF FOSSIL ENERGY 161
Physical Society founded by Max Planck endorse the technophobic disparagement of renewable energy?
One example among many is the book Die Energiefrage (The Energy Question) by Klaus Heinloth, a respected physics professor who sat on the German parliamentary commission of inquiry dealing with the issue of energy supply. Heinloth also draws on the work of the International Panel on Climate Change, a UN organization that provides scientific backing for the declarations of the Global Climate Convention and which clearly recognizes the global risks posed by fossil energy consumption.24 Heinloth attempted to calculate the ‘realizable potential’ for renewable energy, in Germany and across the world, which he believes to be ‘maximally exploitable’ – ie, achievable in the optimum case – by 2050. He concludes that for central heating and hot water, this is two thirds of future demand, for motor fuel 10–15 per cent, for electrical energy 20 per cent, and for (high temperature) process heat ‘as before only negligible’. The contribution of renewable energy to global energy supplies could reach 10 per cent for heating and process heat, 30 per cent for motor fuel, and 30 to 35 per cent for electricity, ‘in the favourable, optimistic case’, ‘as long as’ hydro capacity is doubled between 1995 and 2050, 200,000 MW of solar thermal plant is installed in the tropics, wind capacity is increased a hundredfold (from around 3000 MW installed capacity in 1995) and 2000 km2 of solar panels are installed.
Heinloth does go further in his assumptions than many other physicists. Yet he provides no credible explanation why the total production of generative capacity in the form of wind turbines to 2050 will be no greater that Germany’s current annual car output, or why there should be fewer solar panels worldwide than there are roofs in Germany alone, or why only 10 per cent of global heating needs can be met from the sun, despite the fact that the majority of the global population live in the sun-rich South, and that even in northern Scandinavia whole towns are meeting 50 per cent of their energy needs from the sun; or why he estimates that only 20 per cent of electricity demand will be met from renewable sources in Germany, assuming that demand remains constant to 2050, when that could be achieved using current technology with no more than