Breaking News: Wind and Solar Potentially Aren't Climate Cure-Alls By William Hughes

 The real issue with solar, however, is seasonality. In the Northern Hemisphere during winter, when the earth is angled away from the sun, there is a 50% decrease in solar power production. The only solution to this requires either twice the number of panels, half of which will be excess capacity in the summer, or having back-up power stations that will remain idle for half the year. 

Wind power experiences similar issues and also requires supplementation by other energy sources to account for unpredictable down time. 

Due to the very nature of their design, renewables like solar and wind fail to provide energy security, leading to a reliance on backup power stations, which ultimately contradict the very purpose of installing renewables

Energy Density

Human development has been framed by the energy density ladder, with each rung more energy dense than the last: transitioning from wood, to coal, onto oil and gas, before arriving at nuclear power. For Fergus Cullen solar and wind power represent a step in the wrong direction:

“We’ve actually gone backwards…orders of magnitude backwards”

 Moving back down the energy ladder means we will have to build far more power generators, requiring far more materials and far more space, in exchange for less energy. 

A study by the UK Department of Energy and Climate Change found that to replace Hinkley Point C, a nuclear power plant in Somerset, it would require 130,000 acres of solar farms or  250,000 acres of onshore wind farms, an area roughly the size of Hong Kong.

Considering that Hinkley Point C takes up just 450 acres, the alternatives require between 280-550 times more space for the same capacity. 

Fergus also cites a study which found that the operational lifespan of most wind turbines is significantly lower than the broadly accepted 20-25 years. The report by the Renewable Energy Foundation which analysed 3000 wind turbines in the UK and Denmark found that on average they lasted for just 12-15 years.

So wind power not only requires far more resources and space but it also needs replacing regularly, when compared to the operation lifetime of the average nuclear plant of between 30-40 years, the difference is stark.

To make matters worse, wind turbine blades are currently unrecyclable, and typically end their lives in landfill.

Consequently, solar and wind power represent inefficient and broadly uneconomic alternatives to conventional sources of electricity

Storage

The unpredictable nature of wind and solar power makes energy storage a necessity to stop the lights going out. However, according to Fergus, current battery technology is too expensive and ineffective to provide a scalable solution to this problem.

The Hornsdale Power Reserve lithium-ion battery that serves the Hornsdale Wind Farm in South Australia, was the largest battery in the world at time of construction in 2017.

The Hornsdale battery currently provides 129MWh of storage, but Fergus argues that this isn’t the whole picture. Of the 129MWh just 30MWh, less than a quarter, is actually used for energy storage with the remaining 99MWh being required to stabilise the energy fluctuations from the wind farm.

30MWh in reality represents just 3 hours of power storage, not even enough to sustain power demand for a brief period of still weather.

Then we get to the cost; the Power Reserve battery is currently priced at A$90million, making it more expensive than the actual wind farm, which came in at A$89million.

To make matters worse, a 2020 expansion, which increased storage by just 1.5 hours, cost another $71 million, taking the overall battery cost to 1.8 times that of the entire wind farm.

In the words of Fergus Cullen “4.5 hours of stage is not going to cut it at all”, especially not at those prices.

The Developing World

Bloomberg NEF is predicting that by 2050, China’s energy mix will be 48% solar and wind, whilst India will top 55%, Fergus wholly disagrees.

“With no wind and the seasonality of solar, I don’t see how that can ever happen”

Considering that 97% of population growth is set to occur in developing nations over the next few decades it is very unlikely that renewables will be able to scale quickly enough or affordably to satisfy growing demands.

“If you don’t get buy-in from developing countries, it’s largely irrelevant what developed countries do”

While in the West, subsidies and government grants have underpinned the drive toward solar and wind power, developing countries are unlikely to have either the money nor the willingness to spend enormous amounts on inefficient electricity generation.

Once combined with the higher electricity costs associated with renewables, they quickly cease to be an option for the developing world. 

If renewables remain as uneconomic as they are then Fergus believes that coal is the most likely candidate for electricity generation in the developing world.

You can read more about Fergus’ coal investment thesis here: Why Coal is Still Important and How Your Investment Portfolio Should Reflect That.

Myth Busting

Fergus breaks down the most important myths associated with the renewables argument: 

Capacity Is Not Generation

A huge myth Fergus seeks to tackle is “the apples-for-apples comparison of renewables to baseload”, 1GW of nuclear power can’t simply be replaced by 1GW of wind or solar due to one overlooked reason, capacity factors.

The energy capacity of a power source is not the same as the amount of power it actually produces, for example, nuclear power has a typical capacity factor of 90% so 1GW of capacity translates to 900MW of generation. By contrast, wind sits at 20-40% and solar is even less with just a 10-25% capacity factor, with 1GW of capacity producing 200-400MW and 100-250MW respectively.

To replace 1GW of nuclear capacity you would need between 2.5-5 wind farms or 4-10 solar farms, with 1GW of capacity each. 

Fergus even claims that the capacity factors of renewables, as low as they are, are actually misrepresentations, as the data is taken from solar and wind farms which have been built in optimal locations. Fergus considers this to be similar to the high-grading methods used in the shale industry.

A prime example of the impact of capacity factors would be Japan’s decision to decommission their offshore wind farm in Fukushima Prefecture. Despite being well placed for wind power and with aims to achieve a 30% capacity factor, the project failed, with capacity factors fluctuating between 4-36%.

Japan has since chosen to keep coal as one of their key baseline electricity sources, with plans to build 22 new high-efficiency coal plants by 2025.