Changing course

3 08 2019

I’m a great fan of Jack Alpert’s, having published his videos here before……

However, I’m less than optimistic about this scheme of his, because it’s been shown people are not swayed by facts.… After all, I’ve been trying unsuccessfully for years..!





Rethinking Renewable Mandates

1 08 2019

Posted on July 31, 2019, another terrific post by Gail Tverberg

Powering the world’s economy with wind, water and solar, and perhaps a little wood sounds like a good idea until a person looks at the details. The economy can use small amounts of wind, water and solar, but adding these types of energy in large quantities is not necessarily beneficial to the system.

While a change to renewables may, in theory, help save world ecosystems, it will also tend to make the electric grid increasingly unstable. To prevent grid failure, electrical systems will need to pay substantial subsidies to fossil fuel and nuclear electricity providers that can offer backup generation when intermittent generation is not available. Modelers have tended to overlook these difficulties. As a result, the models they provide offer an unrealistically favorable view of the benefit (energy payback) of wind and solar.

If the approach of mandating wind, water, and solar were carried far enough, it might have the unfortunate effect of saving the world’s ecosystem by wiping out most of the people living within the ecosystem. It is almost certain that this was not the intended impact when legislators initially passed the mandates.

[1] History suggests that in the past, wind and water never provided a very large percentage of total energy supply.

Figure 1. Annual energy consumption per person (megajoules) in England and Wales 1561-70 to 1850-9 and in Italy 1861-70. Figure by Tony Wrigley, Cambridge University.

Figure 1 shows that before and during the Industrial Revolution, wind and water energy provided 1% to 3% of total energy consumption.

For an energy source to work well, it needs to be able to produce an adequate “return” for the effort that is put into gathering it and putting it to use. Wind and water seemed to produce an adequate return for a few specialized tasks that could be done intermittently and that didn’t require heat energy.

When I visited Holland a few years ago, I saw windmills from the 17th and 18th centuries. These windmills pumped water out of low areas in Holland, when needed. A family would live inside each windmill. The family would regulate the level of pumping desired by adding or removing cloths over the blades of the windmill. To earn much of their income, they would also till a nearby plot of land.

This overall arrangement seems to have provided adequate income for the family. We might conclude, from the inability of wind and water energy to spread farther than 1% -3% of total energy consumption, that the energy return from the windmills was not very high. It was adequate for the arrangement I described, but it didn’t provide enough extra energy to encourage greatly expanded use of the devices.

[2] At the time of the Industrial Revolution, coal worked vastly better for most tasks of the economy than did wind or water.

Economic historian Tony Wrigley, in his book Energy and the English Industrial Revolution, discusses the differences between an organic economy (one whose energy sources are human labor, energy from draft animals such as oxen and horses, and wind and water energy) and an energy-rich economy (one that also has the benefit of coal and perhaps other energy sources). Wrigley notes the following benefits of a coal-based energy-rich economy during the period shown in Figure 1:

  • Deforestation could be reduced. Before coal was added, there was huge demand for wood for heating homes and businesses, cooking food, and for making charcoal, with which metals could be smelted. When coal became available, it was inexpensive enough that it reduced the use of wood, benefiting the environment.
  • The quantity of metals and tools was greatly increased using coal. As long as the source of heat for making metals was charcoal from trees, the total quantity of metals that could be produced was capped at a very low level.
  • Roads to mines were greatly improved, to accommodate coal movement. These better roads benefitted the rest of the economy as well.
  • Farming became a much more productive endeavor. The crop yield from cereal crops, net of the amount fed to draft animals, nearly tripled between 1600 and 1800.
  • The Malthusian limit on population could be avoided. England’s population grew from 4.2 million to 16.7 million between 1600 and 1850. Without the addition of coal to make the economy energy-rich, the population would have been capped by the low food output from the organic economy.

[3] Today’s wind, water, and solar are not part of what Wrigley called the organic economy. Instead, they are utterly dependent on the fossil fuel system.

The name renewables reflects the fact that wind turbines, solar panels, and hydroelectric dams do not burn fossil fuels in their capture of energy from the environment.

Modern hydroelectric dams are constructed with concrete and steel. They are built and repaired using fossil fuels. Wind turbines and solar panels use somewhat different materials, but these too are available only thanks to the use of fossil fuels. If we have difficulty with the fossil fuel system, we will not be able to maintain and repair any of these devices or the electricity transmission system used for distributing the energy that they capture.

[4] With the 7.7 billion people in the world today, adequate energy supplies are an absolute requirement if we do not want population to fall to a very low level. 

There is a myth that the world can get along without fossil fuels. Wrigley writes that in a purely organic economy, the vast majority of roads were deeply rutted dirt roads that could not be traversed by wheeled vehicles. This made overland transport very difficult. Canals were used to provide water transport at that time, but we have virtually no canals available today that would serve the same purpose.

It is true that buildings for homes and businesses can be built with wood, but such buildings tend to burn down frequently. Buildings of stone or brick can also be used. But with only the use of human and animal labor, and having few roads that would accommodate wheeled carts, brick or stone homes tend to be very labor-intensive. So, except for the very wealthy, most homes will be made of wood or of other locally available materials such as sod.

Wrigley’s analysis shows that before coal was added to the economy, human labor productivity was very low. If, today, we were to try to operate the world economy using only human labor, draft animals, and wind and water energy, we likely could not grow food for very many people. World population in 1650 was only about 550 million, or about 7% of today’s population. It would not be possible to provide for the basic needs of today’s population with an organic economy as described by Wrigley.

(Note that organic here has a different meaning than in “organic agriculture.” Today’s organic agriculture is also powered by fossil fuel energy. Organic agriculture brings soil amendments by truck, irrigates land and makes “organic sprays” for fruit, all using fossil fuels.)

[5] Wind, water and solar only provided about 11% of the world’s total energy consumption for the year 2018. Trying to ramp up the 11% production to come anywhere close to 100% of total energy consumption seems like an impossible task.

Figure 2. World Energy Consumption by Fuel, based on data of 2019 BP Statistical Review of World Energy.

Let’s look at what it would take to ramp up the current renewables percentage from 11% to 100%. The average growth rate over the past five years of the combined group that might be considered renewable (Hydro + Biomass etc + Wind&Solar) has been 5.8%. Maintaining such a high growth rate in the future is likely to be difficult because new locations for hydroelectric dams are hard to find and because biomass supply is limited. Let’s suppose that despite these difficulties, this 5.8% growth rate can be maintained going forward.

To increase the quantity from 2018’s low level of renewable supply to the 2018 total energy supply at a 5.8% growth rate would take 39 years. If population grows between 2018 and 2057, even more energy supply would likely be required. Based on this analysis, increasing the use of renewables from a 11% base to close to a 100% level does not look like an approach that has any reasonable chance of fixing our energy problems in a timeframe shorter than “generations.”

The situation is not quite as bad if we look at the task of producing an amount of electricity equal to the world’s current total electricity generation with renewables (Hydro + Biomass etc + Wind&Solar); renewables in this case provided 26% of the world’s electricity supply in 2018.

Figure 3. World electricity production by type, based on data from 2019 BP Statistical Review of World Energy.

The catch with replacing electricity (Figure 3) but not energy supplies is the fact that electricity is only a portion of the world’s energy supply. Different calculations give different percentages, with electricity varying between 19% to 43% of total energy consumption.1 Either way, substituting wind, water and solar in electricity production alone does not seem to be sufficient to make the desired reduction in carbon emissions.

[6] A major drawback of wind and solar energy is its variability from hour-to-hour, day-to-day, and season-to-season. Water energy has season-to-season variability as well, with spring or wet seasons providing the most electricity.

Back when modelers first looked at the variability of electricity produced by wind, solar and water, they hoped that as an increasing quantity of these electricity sources were added, the variability would tend to offset. This happens a little, but not nearly as much as one would like. Instead, the variability becomes an increasing problem as more is added to the electric grid.

When an area first adds a small percentage of wind and/or solar electricity to the electric grid (perhaps 10%), the electrical system’s usual operating reserves are able to handle the variability. These were put in place to handle small fluctuations in supply or demand, such as a major coal plant needing to be taken off line for repairs, or a major industrial client reducing its demand.

But once the quantity of wind and/or solar increases materially, different strategies are needed. At times, production of wind and/or solar may need to be curtailed, to prevent overburdening the electric grid. Batteries are likely to be needed to help ease the abrupt transition that occurs when the sun goes down at the end of the day while electricity demand is still high. These same batteries can also help ease abrupt transitions in wind supply during wind storms.

Apart from brief intermittencies, there is an even more serious problem with seasonal fluctuations in supply that do not match up with seasonal fluctuations in demand. For example, in winter, electricity from solar panels is likely to be low. This may not be a problem in a warm country, but if a country is cold and using electricity for heat, it could be a major issue.

The only real way of handling seasonal intermittencies is by having fossil fuel or nuclear plants available for backup. (Battery backup does not seem to be feasible for such huge quantities for such long periods.) These back-up plants cannot sit idle all year to provide these services. They need trained staff who are willing and able to work all year. Unfortunately, the pricing system does not provide enough funds to adequately compensate these backup systems for those times when their services are not specifically required by the grid. Somehow, they need to be paid for the service of standing by, to offset the inevitable seasonal variability of wind, solar and water.

[7] The pricing system for electricity tends to produce rates that are too low for those electricity providers offering backup services to the electric grid.

As a little background, the economy is a self-organizing system that operates through the laws of physics. Under normal conditions (without mandates or subsidies) it sends signals through prices and profitability regarding which types of energy supply will “work” in the economy and which kinds will simply produce too much distortion or create problems for the system.

If legislators mandate that intermittent wind and solar will be allowed to “go first,” this mandate is by itself a substantial subsidy. Allowing wind and solar to go first tends to send prices too low for other producers because it tends to reduce prices below what those producers with high fixed costs require.2

If energy officials decide to add wind and solar to the electric grid when the grid does not really need these supplies, this action will also tend to push other suppliers off the grid through low rates. Nuclear power plants, which have already been built and are adding zero CO2 to the atmosphere, are particularly at risk because of the low rates. The Ohio legislature recently passed a $1.1 billion bailout for two nuclear power plants because of this issue.

If a mandate produces a market distortion, it is quite possible (in fact, likely) that the distortion will get worse and worse, as more wind and solar is added to the grid. With more mandated (inefficient) electricity, customers will find themselves needing to subsidize essentially all electricity providers if they want to continue to have electricity.

The physics-based economic system without mandates and subsidies provides incentives to efficient electricity providers and disincentives to inefficient electricity suppliers. But once legislators start tinkering with the system, they are likely to find a system dominated by very inefficient production. As the costs of handling intermittency explode and the pricing system gets increasingly distorted, customers are likely to become more and more unhappy.

[8] Modelers of how the system might work did not understand how a system with significant wind and solar would work. Instead, they modeled the most benign initial situation, in which the operating reserves would handle variability, and curtailment of supply would not be an issue. 

Various modelers attempted to figure out whether the return from wind and solar would be adequate, to justify all of the costs of supporting it. Their models were very simple: Energy Out compared to Energy In, over the lifetime of a device. Or, they would calculate Energy Payback Periods. But the situation they modeled did not correspond well to the real world. They tended to model a situation that was close to the best possible situation, one in which variability, batteries and backup electricity providers were not considerations. Thus, these models tended to give a far too optimistic estimates of the expected benefit of intermittent wind and solar devices.

Furthermore, another type of model, the Levelized Cost of Electricity model, also provides distorted results because it does not consider the subsidies needed for backup providers if the system is to work. The modelers likely also leave out the need for backup batteries.

In the engineering world, I am told that computer models of expected costs and income are not considered to be nearly enough. Real-world tests of proposed new designs are first tested on a small scale and then at progressively larger scales, to see whether they will work in practice. The idea of pushing “renewables” sounded so good that no one thought about the idea of testing the plan before it was put into practice.

Unfortunately, the real-world tests that Germany and other countries have tried have shown that intermittent renewables are a very expensive way to produce electricity when all costs are considered. Neighboring countries become unhappy when excess electricity is simply dumped on the grid. Total CO2 emissions don’t necessarily go down either.

[9] Long distance transmission lines are part of the problem, not part of the solution. 

Early models suggested that long-distance transmission lines might be used to smooth out variability, but this has not worked well in practice. This happens partly because wind conditions tend to be similar over wide areas, and partly because a broad East-West mixture is needed to even-out the rapid ramp-down problem in the evening, when families are still cooking dinner and the sun goes down.

Also, long distance transmission lines tend to take many years to permit and install, partly because many landowners do not want them crossing their property. In some cases, the lines need to be buried underground. Reports indicate that an underground 230 kV line costs 10 to 15 times what a comparable overhead line costs. The life expectancy of underground cables seems to be shorter, as well.

Once long-distance transmission lines are in place, maintenance is very fossil fuel dependent. If storms are in the area, repairs are often needed. If roads are not available in the area, helicopters may need to be used to help make the repairs.

An issue that most people are not aware of is the fact that above ground long-distance transmission lines often cause fires, especially when they pass through hot, dry areas. The Northern California utility PG&E filed for bankruptcy because of fires caused by its transmission lines. Furthermore, at least one of Venezuela’s major outages seems to have been related to sparks from transmission lines from its largest hydroelectric plant causing fires. These fire costs should also be part of any analysis of whether a transition to renewables makes sense, either in terms of cost or of energy returns.

[10] If wind turbines and solar panels are truly providing a major net benefit to the economy, they should not need subsidies, even the subsidy of going first.

To make wind and solar electricity producers able to compete with other electricity providers without the subsidy of going first, these providers need a substantial amount of battery backup. For example, wind turbines and solar panels might be required to provide enough backup batteries (perhaps 8 to 12 hours’ worth) so that they can compete with other grid members, without the subsidy of going first. If it really makes sense to use such intermittent energy, these providers should be able to still make a profit even with battery usage. They should also be able to pay taxes on the income they receive, to pay for the government services that they are receiving and hopefully pay some extra taxes to help out the rest of the system.

In Item [2] above, I mentioned that when coal mines were added in England, roads to the mines were substantially improved, befitting the economy as a whole. A true source of energy (one whose investment cost is not too high relative to it output) is supposed to be generating “surplus energy” that assists the economy as a whole. We can observe an impact of this type in the improved roads that benefited England’s economy as a whole. Any so-called energy provider that cannot even pay its own fair share of taxes acts more like a leech, sucking energy and resources from others, than a provider of surplus energy to the rest of the economy.

Recommendations

In my opinion, it is time to eliminate renewable energy mandates. There will be some instances where renewable energy will make sense, but this will be obvious to everyone involved. For example, an island with its electricity generation from oil may want to use some wind or solar generation to try to reduce its total costs. This cost saving occurs because of the high price of oil as fuel to make electricity.

Regulators, in locations where substantial wind and/or solar has already been installed, need to be aware of the likely need to provide subsidies to backup providers, in order to keep the electrical system operating. Otherwise, the grid will likely fail from lack of adequate backup electricity supply.

Intermittent electricity, because of its tendency to drive other providers to bankruptcy, will tend to make the grid fail more quickly than it would otherwise. The big danger ahead seems to be bankruptcy of electricity providers and of fossil fuel producers, rather than running out of a fuel such as oil or natural gas. For this reason, I see little reason for the belief by many that electricity will “last longer” than oil. It is a question of which group is most affected by bankruptcies first.

I do not see any real reason to use subsidies to encourage the use of electric cars. The problem we have today with oil prices is that they are too low for oil producers. If we want to keep oil production from collapsing, we need to keep oil demand up. We do this by encouraging the production of cars that are as inexpensive as possible. Generally, this will mean producing cars that operate using petroleum products.

(I recognize that my view is the opposite one from what many Peak Oilers have. But I see the limit ahead as being one of too low prices for producers, rather than too high prices for consumers. The CO2 issue tends to disappear as parts of the system collapse.)

Notes:

[1] BP bases its count on the equivalent fossil fuel energy needed to create the electricity; IEA counts the heat energy of the resulting electrical output. Using BP’s way of counting electricity, electricity worldwide amounts to 43% of total energy consumption. Using the International Energy Agency’s approach to counting electricity, electricity worldwide amounts to only about 19% of world energy consumption.

[2] In some locations, “utility pricing” is used. In these cases, pricing is set in a way needed to provide a fair return to all providers. With utility pricing, intermittent renewables would not be expected to cause low prices for backup producers.





Germany’s renewable energy program, Energiewende, is a big, expensive failure

21 07 2019

Another post about why renewables cannot keep complex civilisation running. Analyses like these are coming thick and fast these days, this one from Alice’s great blog……. you may also want to read a previous post here about The Lesson from Energiewend is that Germany consumes too much energy…….

After reading this post, or better yet the original 44-page document, you’ll understand why the Green New Deal is a bad idea.  This is a cautionary tale worth paying attention to.

The goal of Energiewende was to make Germany independent of fossil fuels.  But it hasn’t worked out.  The 29,000 wind turbines and 1.6 million PV systems provide only 3.1% of Germany’s energy needs and have cost well over 100 billion Euros so far and likely another 450 billion Euros over the next two decades.  And much more than that when you add in the extra cost of maintaining fossil generation systems to back up the lack of wind and sunshine from seconds to weeks.

Because of their extremely low energy density and need for a great deal of space, forests are being cut down, pits dug, and filled with hundreds of tons of reinforced concrete for wind turbines to stand on, 5 acres per turbine. With the forest no longer protecting the soil, it is now vulnerable to wind and rain erosion.

Because wind and solar farms get a guaranteed price for 20 years, they have no need to innovate, do research, or please customers, who paid them 176 billion euros for electricity with a market value of just 5 billion euros from 2000-2016.  This is money that taxpayers could have used to build bridges, energy efficient buildings, or renovate schools, which would create even more jobs than the wind and solar industry claims so they can tout themselves as good for society, perhaps they aren’t so great when you look at other ways and jobs that could have been created with all the subsidies (Vernunftkraft 2018).

Germany’s electricity rates have skyrocketed to the highest levels in the EU because of the Energiewende debacle.

Other news about Energiewende:

  • Germany’s Federal Audit Office has accused the federal government of having largely failed to manage the transformation of Germany’s energy systems (Energiewende  program), and will miss its targets for reducing greenhouse gas emissions, energy consumption and the share of renewable energy in transport.
  • At the same time, policy makers had burdened the nation with enormous costs. The audit further concluded that the program is a monumental bureaucratic nightmare.
  • The build-up of renewables benefited from more than $800 billion in subsidies. 
  • The country has not just been burning coal; it has been burning lignite, one of the dirtiest fuels on the planet. In fact, in 2016, seven of the 10 worst polluting facilities in Europe were German lignite plants.
  • When it’s windy and bright, the grid is so flooded with power that prices in the wholesale market sometimes drop below zero.
  • Transport consumes 30 percent and mining & manufacturing 29% of Germany’s power, but for each, only 4 percent of its energy comes from renewables. Households use 26% of power, but only 13% of it comes from renewables, and Trade, commerce and services 15% but just 7% renewables.  
  • Germany’s carbon emissions have stagnated at roughly their 2009 level. The country remains Europe’s largest producer and burner of coal, which generates more than one-third of Germany’s power supply. Moreover, emissions in the transportation sector have shot up by 20 percent since 1995 and are rising with no end in sight

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical PreppingKunstlerCast 253KunstlerCast278Peak Prosperity , XX2 report

***

Vernunftkraft. 2018. Germanys Energiewende – where we really stand.  Bundesinitiative für vernünftige Energiepolitik, Vernunftkraft.

The Energiewende has the goal of making Germany independent of fossil fuels in the long term. Coal, oil and gas were to be phased out, allowing drastic reductions in carbon dioxide emissions. However, these goals have not even begun to be achieved.

The idea of meeting our country’s energy needs with wind power and solar energy has proven to be an illusion. At present, around 29,000 wind turbines and 1.6 million photovoltaic systems together account for just 3.1 % of our energy requirements.   There were hardly any successes in the heating/cooling and transport sectors.

Well over a hundred billion euros have been spent on the expansion of solar and wind energy over the same period. The financial obligations undertaken in the process will continue to burden taxpayers for another two decades and will end up costing German consumers a total sum of around 550 billion euros.

To compensate for the lack of reliability of wind and sun and to be able to actually replace conventional power generation, gigantic amounts of electricity storage would be required. The replacement of controllable power generation with a fluctuating power supply is impossible without storage and unaffordable with it.

A reliable supply of electricity around the clock is taken for granted by citizens of the Federal Republic of Germany. But only those who have taken a closer look will appreciate the importance of a reliable power supply for our highly complex, high-tech society. It is not just about comfort and convenience. It is not only a matter of maintaining an essential input for important manufacturing processes; it is about nothing less than the functioning of civilized community life.

A fundamental characteristic of electrical current must be taken into account when answering this question: it must be produced, to the millisecond, at the moment of consumption, giving an exact balance between power supply and demand. Stable power grids are based on this principle.

At the end of September 2017, more than 27,000 wind turbines with a rated output of 53,374 MW were installed in Germany. Nominal power is defined as the highest power that can be provided permanently under optimum operating conditions (strong to stormy wind conditions). In Figure 2, the dark blue areas represent the delivered power from the German wind turbine fleet during September 2017. A total of 6,380 GWh (1 GWh = 1 million kWh) was sent to the grid, corresponding to just 16.6 % of what was theoretically possible.  

For approximately half of September 2017, the power delivered by the wind fleet was less than 10 % of the nominal capacity. Values above 50 % were reached only 5.3 % of the time, in essence only on 8 and 13–15 September.

Electricity consumption in September 2017 was 39,000 GWh. Wind turbines delivered for 6400 GWh of this and PV systems another 3100 GWh. The minimum power input by all of the PV and wind energy systems was below 0.6 GW, representing less than 1% of the installed capacity of 96 GW.

Since wind and solar are often absent, conventional power plants are needed to ensure grid stability at all times – often over long periods.  Consumers pay for the costs of maintaining two parallel generation systems.

There is no discernable smoothing effect from the size and geographical spread of the wind fleet: the argument that the wind is always blowing somewhere is not true. Even a Europe-wide wind power expansion in conjunction with a perfectly developed electricity grid would not solve the problem of the fluctuating wind energy generation. It is quite possible for there to be no wind anywhere in Europe.

Anyone who studies the feed-in characteristics of electricity generation from wind power and PV systems thoroughly must realize that sun and wind usually supply either far too little or far too much – and that one cannot rely on anything but chance.

Despite the increased capacity and the increasing peaks, the guaranteed output of all 27,000 wind turbines and the 400 million m² of PV systems remains close to zero because of their weather-dependency. This is a particular problem in the winter months, when electricity consumption is high.

Even the ‘dumping’ of electricity abroad to reduce the surplus energy will become increasingly difficult, since neighboring countries are closing themselves off with electricity barriers in order to protect their own grids.

There is no sunshine at night and electricity cannot be stored in bags

The wind energy statistics reveal the absurdity of wanting to tackle the problem of intermittency through construction of additional power lines and extensive wind power expansion.

So even with a European electricity grid based on wind turbines, a 100 % replacement system would always have to be available to ensure the security of electricity supply.

With PV systems, the lack any smoothing of electricity over the diurnal and seasonal cycles is even more evident. It is obvious that the generation peaks in Germany occur at the same time as the peaks in the other European countries. This is due to the size of the low pressure areas, which results in a positive correlation of wind power generation levels across the continent: if too much electricity is produced in Germany, most of our neighbors will be over-producing too. This calls into question the sense of network expansion a priori.

German energy consumption is particularly high in the winter months, especially during inversion weather conditions, when PV systems barely supply any electricity due to clouds and wind turbines are usually at a standstill. The weather-dependency of electricity generation would thus have direct and fatal effects on the transport sector. It would not be possible to heat electrically either. In other words, renewable energy can’t keep transportation or heating going.

Climate protection: a bad joke with deadly undertones

No discussion about the construction of wind turbines and no energy policy document of the last federal government can avoid the suggestion that the Energiewende might help avert the dangers of climate change. This is why the last German government continually described the EEG as a central instrument of climate protection. The thesis – often presented in a shrill, moralizing tone – is that the expansion of ‘renewable energies’ is a human obligation in view of the impending global warming apocalypse. Particularly perfidious forms of this thesis even suggest that not expanding wind power plants in Germany would mean that we would soon be dealing with ‘billions of climate refugees’.

At least one hectare of forest is cleared per wind turbine and is thus permanently destroyed. Afforestation elsewhere cannot make up for this, since old trees are in every respect much more valuable than new plantations. The negative effects of global warming predicted for Germany are more frequent floods and droughts, but forest is the best form of protection against soil erosion, cleaning soil and storing water.

Whether it is forest destruction, cultivation of maize for biogas plants, the destruction of habitats or the direct killing of birds and bats – the massive expansion of ‘renewable energies’ has appalling consequences, the result of their low energy density and the resulting requirement for vast areas of land.

Besides intermittency, the core problem of wind and solar energy is that it is generated in a very diffuse form. Anyone who has ridden a bike against the wind will understand: a headwind of 3m/s makes clothes flutter a little, but hardly makes it difficult to pedal. Water, on the other hand, flowing towards us at the same speed, will wash us away. This is because the power of water is comparatively concentrated, while the power of the wind is much more diffuse. In the case of hydropower, ‘collecting from the surface’ is done by a wide system of ditches, brooks, rivers and streams. If you want to ‘capture’ the power of the wind, you have to do the tedious work of concentrating the energy yourself – requiring a multitude of collection stations and power lines to connect them. Instead of ditches, streams, and rivers wind power required 200-m-high industrial installations, pylons and wires. Inevitably, natural areas become industrialized and opportunities for retreat in nature are gradually destroyed.

A few years ago, a wind turbine invasion of the many forests that have been managed for decades in accordance with the principle of sustainability was still unimaginable. But huge pits are now being dug and filled with thousands of tons of reinforced concrete, with considerable effects on the ecosystem. The effects on wildlife, soils and water as well as on the aesthetics and natural harmony of hilltop landscapes are catastrophic.

The direct cost drivers of electricity prices are the feed-in tariffs set out in the legislation: operators of wind farms, PV and biomass plants will receive a guaranteed price per kilowatt hour, fixed for 20 years after commissioning. This is set at a level that is many times higher than the market price. The difference is passed on to (almost) all consumers via the electricity price. In addition, producers are guaranteed to be able to sell electricity into the grid at that price, regardless of whether there is a need for it or not.

In the period 2000–2016, 176 billion euros were paid by electricity consumers to renewables companies, for electricity with a market value of just 5 billion euros.

What else could have been done with this money?  This is known in economic terms as the ‘opportunity cost’.  For example, the St Gotthard tunnel opened in 2016 at a cost of 3.4 billion euros; the Hamburg Elbe Philharmonic Hall cost 0.8 billion euros. The refurbishment needs of all German schools are estimated to total just 34 billion euros.

The fact that electricity from wind and sun is randomly produced puts the power supply system under considerable and increasing stress. The task of transmission system operators to maintain a constant 50Hz alternating voltage becomes more difficult with each additional weather-dependent and privileged feeding system. In order to cope with increasing volatility, the generation output must be repeatedly intervened in order to protect line sections from overload.

If a bottleneck threatens at a certain point in the grid, power plants on this side of the bottleneck are instructed to reduce their feed-in, while plants beyond the bottleneck must increase their output. The need for re-dispatching  will continue to increase.  Together with the expansion of wind power, the costs of these re-dispatching measures rose continuously. By 2015, grid operators had to spend a billion euros to protect the power grid from the blackout. Since this billion did not ‘fall from the sky’, the unreliability of EEG electricity is reflected in higher electricity prices.

But that’s not all: In order to protect themselves from unwanted erratic electricity inflows and to prevent their grids from being endangered, our neighbors in the Czech Republic and Poland were forced to install phase shifters, i.e. to erect ‘electrical current barriers’. The costs of these self-defense measures are also borne by German consumers.

The ‘energy revolution’ is often referred to as a modernization and innovation program. Germany will become a global leader in technology development, is the slogan. In green-inspired literature, ‘wind and solar’ should be celebrated as the ‘winners’. However, the real world is only partially impressed by this case: those technologies that prove to be economic will win, not those that bureaucrats and officials favor. Long-term economic gains can only be made through competition. However, with renewables, the competitive mechanism is switched off: prices and quantities are determined in a political process, the outcome of which is ultimately determined by the producers of renewable energy themselves.

If post-war governments had adopted the same approach for the automobile industry, it might have demanded that by the year 2000 every German must have a car. The Volkswagen Beetle – at the time, one of the most technically advanced cars in the world – would have been declared an industry standard and a purchase price that would deliver `cars for all’ would have been determined in a biennial consultation process between government and manufacturers. As a result, we would still have vehicles of the technical standard of the VW Beetle, innovation would be irrelevant, and the German industry would never have achieved its position of global leadership.

The plight of the German photovoltaic industry, which rapidly lost international market share and had to cope with many insolvencies, is an example of this. The availability of easy money – subsidies – was the main rea son for the sector’s loss of competitiveness.  It is a harbinger of what can be expected in other artificially nurtured segments of the renewables sector.

Subsidies, however, take away their incentive to innovate. German PV companies invested only 2–3 % of their sales in research and development. In the highly competitive automobile industry, the equivalent figure is 6%; in the pharmaceutical industry it is even higher, at around 9 %. Subsidies make businesses sluggish.

Green jobs? On large posters and in advertisements in autumn 2015, the Energiewende congratulated itself for the creation of ‘230,000 sustainable jobs’. This myth of a ‘job creating’ energy transition is regularly disseminated. Of course, the energy transition is shifting purchasing power from traditional consumer and capital goods industries to industries that produce wind turbines, solar panels and other equipment. This shift generates gross jobs in the those sectors: wind turbines, solar parks and biogas plants must be built. The components have to be produced, delivered and assembled; the finished systems have to be maintained. The investments require financing and credit agreements. This creates employment in banks and law firms. Subsidies must be regulated and monitored, which leads to even employment in the bureaucracy and, once again, lawyers’ offices.  

It should also be noted that were the money not spent on ‘renewable energies’, investments could have been made in other areas that would also have created employment. If, for example, the 178 billion euros mentioned above had been used to renovate schools, the order books of countless businesses would have remained full for many years to come.

If one wants to focus not only on short-term economic effects, but also on long-term growth, one has to ask not only about the scope, but also about the type of investments made. Otherwise you run the risk of losing to ‘Broken Window’ fallacy. According to this, a large stone would have to be thrown through the nearest window as powerfully as possible as an immediate measure of economic policy. This would ultimately give the glazier a large order and thus income, of which he would spend a portion on the confectioner, for example, and thus generate income again. An income that he in turn would spend partly on the butcher, resulting in a virtuous circle that would ultimately benefit everyone and increase national wealth…

Anyone who produces electricity will be remunerated at a guaranteed rate far above the market price for a period of 20 years. EEG beneficiaries do not need to worry about the needs of customers, the offerings of competitors, technical progress or other such ‘banalities’. The search for profitable locations is made easier for wind power producers insofar as the fixed prices per kWh are in essence higher at ‘bad’ locations than at ‘good’ ones. This principle – of incentivizing the use of bad locations – can intuitively be recognized as foolish, but was nevertheless adopted in the tendering procedures of the 2017 revision of the EEG. This absurdity was justified with a claim the fact that an expansion of the area covered in windfarms would lead to a reduction in the volatility of the electricity supplied – a fundamentally wrong idea

Tax consultant Daldorf, analyzed over 1600 annual financial statements of wind energy projects between 2005 and 2013. They found that the vast majority of wind farms in Germany operate at a loss. With many local wind farms, investors are lucky to get their original investment back at all. Daldorf gives the following reasons for the poor performance of windfarms:

  • poor wind assessments or no one-year wind measurements on site
  • erroneous wind indexes as a basis for planning
  • overly low margins of error in wind forecasts
  • underestimates of plant downtime for maintenance and repairs
  • ’planning optimism’ of the project promoters as a strategy for maximizing profits

The operators and investors bear the full risk. Before they can make a profit, the following costs must be covered from the sales achieved:

  • lease costs
  • insurance premiums, fees
  • maintenance costs
  • repairs, reserves for dismantling costs
  • management costs
  • administrative and other costs
  • interest-costs
  • taxes

The cubic relationship between wind force and power generation is decisive for the frequent red numbers: a doubling or halving of the wind speed changes the generation by a factor of eight. The smallest deviations from the expected wind input are reflected in sharp deviations in power generation and thus in revenues. Measurements on wind masts are the most accurate method, but even here the typical error range is 2–8 %. The uncertainty of measurement alone causes an uncertainty of the expected yield of up to 16 %. Measurements with optical methods (LIDAR) or even wind assessments are even less accurate. Anyone who evaluates such measurements will find that the operation of wind farms entails considerable economic risks. These risks apply in particular to wind assessments, whose error rate is in the order of 20 %.

The profit is almost solely determined by the annual electricity yield. No matter how clever the marketing may be, it cannot influence profitability, which depends on the whims of the weather.

Investment in wind turbines on the basis of wind assessments is close to gambling. Anyone who does so is responsible for their own downfall. However, anyone who lives in a community whose elected representatives fall for the promises of windfarm promoters is virtually forced to the roulette table.

The cardinal problems – weather-dependence and low energy density – are unsolved or unsolvable.

My note: there are even more reasons in this document than I have listed above for why Energiewende is a failure. And also see:





No, I don’t hate “renewables”

20 07 2019

Another masterpiece from Tim who keeps churning out great stuff on his website……

During a conversation with a friend yesterday I was asked why I was so hostile toward “renewables” – or as I prefer to call them, non-renewablerenewable energy-harvesting technologies.  My answer was that I am not opposed to these technologies, but rather to the role afforded to them by the Bright Green techno-utopian crowd, who continue to churn out propaganda to the effect that humankind can continue to metastasise across the universe without stopping for breath simply by replacing the energy we derive from fossil fuels with energy we harvest with wind and tide turbines, solar panels and geothermal pumps.  These, I explained to my friend, will unquestionably play a role in our future; but to nowhere near the extent claimed by the proponents of green capitalism, ecosocialism or the green new deal.

It would seem that I was not alone in being asked why I was so disapproving of “renewables.”  On the same day, American essayist John Michael Greer addressed the same question on his Ecosophia blog:

“Don’t get me wrong, I’m wholly in favor of renewables; they’re what we’ll have left when fossil fuels are gone; but anyone who thinks that the absurdly extravagant energy use that props up a modern lifestyle can be powered by PV cells simply hasn’t done the math. Yet you’ll hear plenty of well-intentioned people these days insisting that if we only invest in solar PV we can stop using fossil fuels and still keep our current lifestyles.”

Greer also explains why so many techno-utopians have such a starry-eyed view of “renewables” like solar panels:

“The result of [decades of development] can be summed up quite readily: the only people who think that an energy-intensive modern lifestyle can be supported entirely on solar PV are those who’ve never tried it. You can get a modest amount of electrical power intermittently from PV cells; if you cover your roof with PV cells and have a grid tie-in that credits you at a subsidized rate, you can have all the benefits of fossil fuel-generated electricity and still convince yourself that you’re not dependent on fossil fuels; but if you go off-grid, you’ll quickly learn the hard limits of solar PV.”

Greer is not alone in having to spell this out.  The first article I read yesterday morning was a new post from Tim Morgan on his Surplus Energy Economics blog, where he makes the case that even if we were not facing a climate emergency, our dependence upon fossil fuels still dooms our civilisation to an imminent collapse:

“Far from ensuring ‘business as usual’, continued reliance on fossil fuel energy would have devastating economic consequences. As is explained here, the world economy is already suffering from these effects, and these have prompted the adoption of successively riskier forms of financial manipulation in a failed effort to sustain economic ‘normality’.”

The reason is what Morgan refers to as the rapidly-rising “energy cost of energy” (ECoE) – a calculation related to Net Energy and Energy Return on Energy Invested (EROI).  Put simply, industrial civilisation has devoured each fossil fuel beginning with the cheapest and easiest deposits and then falling back on ever harder and more expensive deposits as these run out.  The result is that the amount of surplus energy left over to grow the economy after we have invested in energy for the future and in the maintenance and repair of the infrastructure we have already developed gets smaller and harder to obtain with each passing month.

Morgan sets out four factors which determine the Energy Cost of Energy:

  • Geographical reach – as local deposits are exhausted, we are obliged to go further afield for replacements.
  • Economies of scale – as our infrastructure develops, we rationalise it in order to keep costs to a minimum; for example, having a handful of giant oil refineries rather than a large number of small ones. Unfortunately, this is a one-off gain, after which the cost of maintenance and repair results in diminishing returns.
  • Depletion – most of the world’s oil and coal deposits are now in decline, after providing the basis for the development of industrial civilisation. Without replacement, depletion dooms us to some form of degrowth.
  • Technology – the development of technologies that provide a greater return for the energy invested can offset some of the rising ECoE, but like economies of scale, they come with diminishing returns and are ultimately limited by the laws of thermodynamics:

“To be sure, advances in technology can mitigate the rise in ECoEs, but technology is limited by the physical properties of the resource. Advances in techniques have reduced the cost of shale liquids extraction to levels well below the past cost of extracting those same resources, but have not turned America’s tight sands into the economic equivalent of Saudi Arabia’s al Ghawar, or other giant discoveries of the past.

“Physics does tend to have the last word.”

Morgan argues that by focusing solely on financial matters, mainstream economics misses the central role of surplus energy in the economy:

“According to SEEDS – the Surplus Energy Economics Data System – world trend ECoE rose from 2.9% in 1990 to 4.1% in 2000. This increase was more than enough to stop Western prosperity growth in its tracks.

“Unfortunately, a policy establishment accustomed to seeing all economic developments in purely financial terms was at a loss to explain this phenomenon, though it did give it a name – “secular stagnation”.

“Predictably, in the absence of an understanding of the energy basis of the economy, recourse was made to financial policies in order to ‘fix’ this slowdown in growth.

“The first such initiative was credit adventurism. It involved making debt easier to obtain than ever before. This approach was congenial to a contemporary mind-set which saw ‘deregulation’ as a cure for all ills.”

The inevitable result was the financial crash in 2008, when unrepayable debt threatened to unwind the entire global financial system.  And while the financial crisis has been temporarily offset by more of the same medicine – quantitative easing and interest rate cuts – it has been the continued expansion of emerging markets that has actually kept the system limping along:

“World average prosperity per capita has declined only marginally since 2007, essentially because deterioration in the West has been offset by continued progress in the emerging market (EM) economies. This, though, is nearing its point of inflexion, with clear evidence now showing that the Chinese economy, in particular, is in very big trouble.

“As you’d expect, these trends in underlying prosperity have started showing up in ‘real world’ indicators, with trade in goods, and sales of everything from cars and smartphones to computer chips and industrial components, now turning down. As the economy of ‘stuff’ weakens, a logical consequence is likely to be a deterioration in demand for the energy and other commodities used in the supply of “stuff”.

“Simply stated, the economy has now started to shrink, and there are limits to how long we can hide this from ourselves by spending ever larger amounts of borrowed money.”

The question this raises is not simply, can we replace fossil fuels with non-renewable renewable energy-harvesting technologies (Morgan refers to them as “secondary applications of primary energy from fossil fuels”) but can we deploy them at an ECoE that allows us to avoid the collapse of industrial civilisation?  Morgan argues not.  The techno-utopian bad habit of applying Moore’s Law to every technology has allowed economists and politicians to assume that the cost of non-renewable renewable energy-harvesting technologies will keep halving even as the energy they generate continues to double.  However:

“[W]e need to guard against the extrapolatory fallacy which says that, because the ECoE of renewables has declined by x% over y number of years, it will fall by a further x% over the next y. The problem with this is that it ignores the limits imposed by the laws of physics.”

More alarming, however, is the high ECoE of non-renewable renewable energy-harvesting technologies; despite their becoming cheaper than some fossil fuel deposits:

“…there can be no assurance that the ECoE of a renewables-based energy system can ever be low enough to sustain prosperity. Back in the ‘golden age’ of prosperity growth (in the decades immediately following 1945), global ECoE was between 1% and 2%. With renewables, the best that we can hope for might be an ECoE stable at perhaps 8%, far above the levels at which prosperity deteriorates in the West, and ceases growing in the emerging economies.”

At this point, no doubt, some readers at least will be asking Morgan why he dislikes “renewables” so much.  And his answer is the same as Greer’s and my own:

“These cautions do not, it must be stressed, undermine the case for transitioning from fossil fuels to renewables. After all, once we understand the energy processes which drive the economy, we know where continued dependency on ever-costlier fossil fuels would lead.

“There can, of course, be no guarantees around a successful transition to renewable forms of energy. The slogan “sustainable development” has been adopted by the policy establishment because it seems to promise the public that we can tackle environmental risk without inflicting economic hardship, or even significant inconvenience.”

Morgan’s broad point here is that there is a false dichotomy between addressing environmental concerns and maintaining economic growth.  The economy is toast irrespective of whether we address environment crises or not.  There is not enough fossil fuel energy to prevent he system from imploding – the only real question to be answered is whether we continue with business as usual until we crash and burn or whether we take at least some mitigating actions to preserve a few of the beneficial aspects of the last 250 years of economic development.  After all, having clean drinking water, enough food to ward off starvation and some basic health care would make the coming collapse easier than it otherwise might be.

The problem, however, is that even with the Herculean efforts to deploy non-renewable renewable energy-harvesting technologies in the decades since the oil crisis in 1973, they still only account for four percent of our primary energy.  As Morgan cautions, it is too easy for westerners to assume that our total energy consumption is entirely in the gas and electricity we use at home and in the fuel we put in the tanks of our vehicles.  In reality this is but a tiny fraction of our energy use (and carbon footprint) with most of our energy embodied within all of the goods and services we consume.  Not only does fossil fuel account for more than 85 percent of the world’s primary energy, but both BP and the International Energy Agency reports for 2018 show that fossil fuel consumption is growing at a faster rate than non-renewable renewable energy-harvesting technologies are being installed.

Nor is there a green new deal route out of this problem.  As a recent letter to the UK’s Committee on Climate Change, authored by Natural History Museum Head of Earth Sciences Prof Richard Herrington et al., warns:

“To replace all UK-based vehicles today with electric vehicles (not including the LGV and HGV fleets), assuming they use the most resource-frugal next-generation NMC 811 batteries, would take 207,900 tonnes cobalt, 264,600 tonnes of lithium carbonate (LCE), at least 7,200 tonnes of neodymium and dysprosium, in addition to 2,362,500 tonnes copper. This represents, just under two times the total annual world cobalt production, nearly the entire world production of neodymium, three quarters the world’s lithium production and at least half of the world’s copper production during 2018. Even ensuring the annual supply of electric vehicles only, from 2035 as pledged, will require the UK to annually import the equivalent of the entire annual cobalt needs of European industry…

“There are serious implications for the electrical power generation in the UK needed to recharge these vehicles. Using figures published for current EVs (Nissan Leaf, Renault Zoe), driving 252.5 billion miles uses at least 63 TWh of power. This will demand a 20% increase in UK generated electricity.

“Challenges of using ‘green energy’ to power electric cars: If wind farms are chosen to generate the power for the projected two billion cars at UK average usage, this requires the equivalent of a further years’ worth of total global copper supply and 10 years’ worth of global neodymium and dysprosium production to build the windfarms.

“Solar power is also problematic – it is also resource hungry; all the photovoltaic systems currently on the market are reliant on one or more raw materials classed as “critical” or “near critical” by the EU and/ or US Department of Energy (high purity silicon, indium, tellurium, gallium) because of their natural scarcity or their recovery as minor-by-products of other commodities. With a capacity factor of only ~10%, the UK would require ~72GW of photovoltaic input to fuel the EV fleet; over five times the current installed capacity. If CdTe-type photovoltaic power is used, that would consume over thirty years of current annual tellurium supply.

“Both these wind turbine and solar generation options for the added electrical power generation capacity have substantial demands for steel, aluminium, cement and glass.”

Put simply, there is not enough Planet Earth left for us to grow our way to sustainability.  The only option open to us is to rapidly shrink our activities and our population back to something that can be sustained without further depleting the planet we depend upon.  Continue with business as usual and Mother Nature is going to do to us what we did to the dodo and the passenger pigeon.  Begin taking some radical action – which still allows the use of some resources and fossil fuels – to switch from an economy of desires to one of needs and at least a fewhumans might survive what is coming.

The final problem, though, is that very few people – including many of those who protest government inaction on the environment – are prepared to make the sacrifices required.  Nor are our corporations and institutions prepared to forego their power and profits for the greater good.  And that leaves us with political structures that will inevitably favour business as usual.

So no, I don’t hate “renewables” – I just regard those who blithely claim that we can deploy and use them to replace fossil fuels without breaking a sweat to be as morally bankrupt as any climate change denying politician you care to mention.  There is a crash on the horizon, the likes of which we haven’t seen since the fourteenth century.  When the energy cost of securing energy – whether fossil fuel, nuclear or renewable – exceeds the energy cost of sustaining the system; our ability to take mitigating action will be over.  Exactly when this is going to happen is a matter of speculation (we should avoid mistaking inevitability for imminence).  Nevertheless, the window for taking action is closing fast; and promising Bright Green utopias as we slide over the cliff edge is not helping anybody.





Why stimulus can’t fix our energy problems

11 07 2019

If EVER you needed proof there is no energy transition happening, and that growth in fossil fuels consumption is increasing, or that without de-industrialization there is no way known we’ll avoid catastrophic climate change, then this article by Gail Tverberg is it……..

The years during which the quantities of material resources cease to grow correspond almost precisely to recessionary years.

Furthermore, Gail’s “2% lag” mentioned below proves the global economy is in serious trouble. Here in Australia for instance, car sales have been dropping for fourteen months straight……

Posted on July 10, 2019 by Gail Tverberg

Economists tell us that within the economy there is a lot of substitutability, and they are correct. However, there are a couple of not-so-minor details that they overlook:

  • There is no substitute for energy. It is possible to harness energy from another source, or to make a particular object run more efficiently, but the laws of physics prevent us from substituting something else for energy. Energy is required whenever physical changes are made, such as when an object is moved, or a material is heated, or electricity is produced.
  • Supplemental energy leverages human energy. The reason why the human population is as high as it is today is because pre-humans long ago started learning how to leverage their human energy (available from digesting food) with energy from other sources. Energy from burning biomass was first used over one million years ago. Other types of energy, such as harnessing the energy of animals and capturing wind energy with sails of boats, began to be used later. If we cut back on our total energy consumption in any material way, humans will lose their advantage over other species. Population will likely plummet because of epidemics and fighting over scarce resources.

Many people appear to believe that stimulus programs by governments and central banks can substitute for growth in energy consumption. Others are convinced that efficiency gains can substitute for growing energy consumption. My analysis indicates that workarounds, in the aggregate, don’t keep energy prices high enough for energy producers. Oil prices are at risk, but so are coal and natural gas prices. We end up with a different energy problem than most have expected: energy prices that remain too low for producers. Such a problem can have severe consequences.

Let’s look at a few of the issues involved:

[1] Despite all of the progress being made in reducing birth rates around the globe, the world’s population continues to grow, year after year.

Figure 1. 2019 World Population Estimates of the United Nations. Source: https://population.un.org/wpp/Download/Standard/Population/

Advanced economies in particular have been reducing birth rates for many years. But despite these lower birthrates, world population continues to rise because of the offsetting impact of increasing life expectancy. The UN estimates that in 2018, world population grew by 1.1%.

[2] This growing world population leads to a growing use of natural resources of every kind.

There are three reasons we might expect growing use of material resources:

(a) The growing world population in Figure 1 needs food, clothing, homes, schools, roads and other goods and services. All of these needs lead to the use of more resources of many different types.

(b) The world economy needs to work around the problems of an increasingly resource-constrained world. Deeper wells and more desalination are required to handle the water needs of a rising population. More intensive agriculture (with more irrigation, fertilization, and pest control) is needed to harvest more food from essentially the same number of arable acres. Metal ores are increasingly depleted, requiring more soil to be moved to extract the ore needed to maintain the use of metals and other minerals. All of these workarounds to accommodate a higher population relative to base resources are likely to add to the economy’s material resource requirements.

(c) Energy products themselves are also subject to limits. Greater energy use is required to extract, process, and transport energy products, leading to higher costs and lower net available quantities.

Somewhat offsetting these rising resource requirements is the inventiveness of humans and the resulting gradual improvements in technology over time.

What does actual resource use look like? UN data summarized by MaterialFlows.net shows that extraction of world material resources does indeed increase most years.

Figure 2. World total extraction of physical materials used by the world economy, calculated using  weight in metric tons. Chart is by MaterialFlows.net. Amounts shown are based on the Global Material Flows Database of the UN International Resource Panel. Non-metallic minerals include many types of materials including sand, gravel and stone, as well as minerals such as salt, gypsum and lithium.

[3] The years during which the quantities of material resources cease to grow correspond almost precisely to recessionary years.  

If we examine Figure 2, we see flat periods or periods of actual decline at the following points: 1974-75, 1980-1982, 1991, and 2008-2009. These points match up almost exactly with US recessionary periods since 1970:

Figure 3. Dates of US recessions since 1970, as graphed by the Federal Reserve of St. Louis.

The one recessionary period that is missed by the Figure 2 flat periods is the brief recession that occurred about 2001.

[4] World energy consumption (Figure 4) follows a very similar pattern to world resource extraction (Figure 2).

Figure 4. World Energy Consumption by fuel through 2018, based on 2019 BP Statistical Review of World Energy. Quantities are measured in energy equivalence. “Other Renew” includes a number of kinds of renewables, including wind, solar, geothermal, and sawdust burned to provide electricity. Biofuels such as ethanol are included in “Oil.”

Note that the flat periods are almost identical to the flat periods in the extraction of material resources in Figure 2. This is what we would expect, if it takes material resources to make goods and services, and the laws of physics require that energy consumption be used to enable the physical transformations required for these goods and services.

[5] The world economy seems to need an annual growth in world energy consumption of at least 2% per year, to stay away from recession.

There are really two parts to projecting how much energy consumption is needed:

  1. How much growth in energy consumption is required to keep up with growing population?
  2. How much growth in energy consumption is required to keep up with the other needs of a growing economy?

Regarding the first item, if the population growth rate continues at a rate similar to the recent past (or slightly lower), about 1% growth in energy consumption is needed to match population growth.

To estimate how much growth in energy supply is needed to keep up with the other needs of a growing economy, we can look at per capita historical relationships:

Figure 5. Three-year average growth rates of energy consumption and GDP. Energy consumption growth per capita uses amounts provided in BP 2019 Statistical Review of World Energy. World per capita GDP amounts are from the World Bank, using GDP on a 2010 US$ basis.

The average world per capita energy consumption growth rate in non-recessionary periods varies as follows:

  • All years: 1.5% per year
  • 1970 to present: 1.3% per year
  • 1983 to present: 1.0% per year

Let’s take 1.0% per year as the minimum growth in energy consumption per capita required to keep the economy functioning normally.

If we add this 1% to the 1% per year expected to support continued population growth, the total growth in energy consumption required to keep the economy growing normally is about 2% per year.

Actual reported GDP growth would be expected to be higher than 2%. This occurs because the red line (GDP) is higher than the blue line (energy consumption) on Figure 5. We might estimate the difference to be about 1%. Adding this 1% to the 2% above, total reported world GDP would be expected to be about 3% in a non-recessionary environment.

There are several reasons why reported GDP might be higher than energy consumption growth in Figure 5:

  • A shift to more of a service economy, using less energy in proportion to GDP growth
  • Efficiency gains, based on technological changes
  • Possible intentional overstatement of reported GDP amounts by some countries to help their countries qualify for loans or to otherwise enhance their status
  • Intentional or unintentional understatement of inflation rates by reporting countries

[6] In the years subsequent to 2011, growth in world energy consumption has fallen behind the 2% per year growth rate required to avoid recession.

Figure 7 shows the extent to which energy consumption growth has fallen behind a target growth rate of 2% since 2011.

Figure 6. Indicated amounts to provide 2% annual growth in energy consumption, as well as actual increases in world energy consumption since 2011. Deficit is calculated as Actual minus Required at 2%. Historical amounts from BP 2019 Statistical Review of World Energy.

[7] The growth rates of oil, coal and nuclear have all slowed to below 2% per year since 2011. While the consumption of natural gas, hydroelectric and other renewables is still growing faster than 2% per year, their surplus growth is less than the deficit of oil, coal and nuclear.  

Oil, coal, and nuclear are the types of energy whose growth has lagged below 2% since 2011.

Figure 7. Oil, coal, and nuclear growth rates have lagged behind the target 2% growth rate. Amounts based on data from BP’s 2019 Statistical Review of World Energy.

The situations behind these lagging growth rates vary:

  • Oil. The slowdown in world oil consumption began in 2005, when the price of oil spiked to the equivalent of $70 per barrel (in 2018$). The relatively higher cost of oil compared with other fuels since 2005 has encouraged conservation and the switching to other fuels.
  • Coal. China, especially, has experienced lagging coal production since 2012. Production costs have risen because of depleted mines and more distant sources, but coal prices have not risen to match these higher costs. Worldwide, coal has pollution issues, encouraging a switch to other fuels.
  • Nuclear. Growth has been low or negative since the Fukushima accident in 2011.

Figure 8 shows the types of world energy consumption that have been growing more rapidly than 2% per year since 2011.

Figure 8. Natural gas, hydroelectric, and other renewables (including wind and solar) have been growing more rapidly than 2% since 2011. Amounts based on data from BP’s 2019 Statistical Review of World Energy.

While these types of energy produce some surplus relative to an overall 2% growth rate, their total quantity is not high enough to offset the significant deficit generated by oil, coal, and nuclear.

Also, it is not certain how long the high growth rates for natural gas, hydroelectric, and other renewables can persist. The growth in natural gas may slow because transport costs are high, and consumers are not willing/able to pay for the high delivered cost of natural gas, when distant sources are used. Hydroelectric encounters limits because most of the good sites for dams are already taken. Other renewables also encounter limits, partly because many of the best sites are already taken, and partly because batteries are needed for wind and solar, and there is a limit to how fast battery makers can expand production.

Putting the two groupings together, we obtain the same deficit found in Figure 6.

Figure 9. Comparison of extra energy over targeted 2% growth from natural gas, hydroelectric and other renewables with energy growth deficit from oil, coal and nuclear combined. Amounts based on data from BP’s 2019 Statistical Review of World Energy.

Based on the above discussion, it seems likely that energy consumption growth will tend to lag behind 2% per year for the foreseeable future.

[8] The economy needs to produce its own “demand” for energy products, in order to keep prices high enough for producers. When energy consumption growth is below 2% per year, the danger is that energy prices will fall below the level needed by energy producers.

Workers play a double role in the economy:

  • They earn wages, based on their jobs, and
  • They are the purchasers of goods and services.

In fact, low-wage workers (the workers that I sometimes call “non-elite workers”) are especially important, because of their large numbers and their role in buying many items that use significant amounts of energy. If these workers aren’t earning enough, they tend to cut back on their discretionary buying of homes, cars, air conditioners, and even meat. All of these require considerable energy in their production and in their use.

High-wage workers tend to spend their money differently. Most of them have already purchased as many homes and vehicles as they can use. They tend to spend their extra money differently–on services such as private education for their children, or on investments such as shares of stock.

An economy can be configured with “increased complexity” in order to save energy consumption and costs. Such increased complexity can be expected to include larger companies, more specialization and more globalization. Such increased complexity is especially likely if energy prices rise, increasing the benefit of substitution away from the energy products. Increased complexity is also likely if stimulus programs provide inexpensive funds that can be used to buy out other firms and for the purchase of new equipment to replace workers.

The catch is that increased complexity tends to reduce demand for energy products because the new way the economy is configured tends to increase wage disparity. An increasing share of workers are replaced by machines or find themselves needing to compete with workers in low-wage countries, lowering their wages. These lower wages tend to lower the demand of non-elite workers.

If there is no increase in complexity, then the wages of non-elite workers can stay high. The use of growing energy supplies can lead to the use of more and better machines to help non-elite workers, and the benefit of those machines can flow back to non-elite workers in the form of higher wages, reflecting “higher worker productivity.” With the benefit of higher wages, non-elite workers can buy the energy-consuming items that they prefer. Demand stays high for finished goods and services. Indirectly, it also stays high for commodities used in the process of making these finished goods and services. Thus, prices of energy products can be as high as needed, so as to encourage production.

In fact, if we look at average annual inflation-adjusted oil prices, we find that 2011 (the base year in Sections [6] and [7]) had the single highest average price for oil.1 This is what we would expect, if energy consumption growth had been adequate immediately preceding 2011.

Figure 10. Historical inflation-adjusted Brent-equivalent oil prices based on data from 2019 BP Statistical Review of World Energy.

If we think about the situation, it not surprising that the peak in average annual oil prices took place in 2011, and the decline in oil prices has coincided with the growing net deficit shown in Figures 6 and 9. There was really a double loss of demand, as growth in energy use slowed (reducing direct demand for energy products) and as complexity increased (shifting more of the demand to high-wage earners and away from the non-elite workers).

What is even more surprising is that fact that the prices of fuels in general tend to follow a similar pattern (Figure 11). This strongly suggests that demand is an important part of price setting for energy products of all kinds. People cannot buy more goods and services (made and transported with energy products) than they can afford over the long term.

Figure 11. Comparison of changes in oil prices with changes in other energy prices, based on time series of historical energy prices shown in BP’s 2019 Statistical Review of World Energy. The prices in this chart are not inflation-adjusted.

If a person looks at all of these charts (deficits in Figures 6 and 9 and oil and energy prices in general from Figures 10 and 11) for the period 2011 onward, there is a very distinct pattern. There is at first a slow slide down, then a fast slide down, followed (at the end) by an uptick. This is what we should expect, if low energy growth is leading to low prices for energy products in general.

[9] There are two different ways that oil and other energy prices can damage the economy: (a) by rising too high for consumers or (b) by falling too low for producers to have funds for reinvestment, taxes and other needs. The danger at this point is from (b), energy prices falling too low for producers.  

Many people believe that the only energy problem that an economy can have is prices that are too high for consumers. In fact, energy prices seemed to be very high in the lead-ups to the 1974-1975 recession, the 1980-1982 recession, and the 2008-2009 recession. Figure 5 shows that the worldwide growth in energy consumption was very high in the lead-up to all three of these recessions. In the two earlier time periods, the US, Europe, and the Soviet Union were all growing their economies, leading to high demand. Preceding the 2008-2009 Great Recession, China was growing its economy very rapidly at the same time the US was providing low-interest rate rates for home purchases, some of them to subprime borrowers. Thus, demand was very high at that time.

The 1974-75 recession and the 1980-1982 recession were fixed by raising interest rates. The world economy was overheating with all of the increased leveraging of human energy with energy products. Higher short-term interest rates helped bring growth in energy prices (as well as food prices, which are very dependent on energy consumption) down to a more manageable level.

Figure 12. Three-month and ten-year interest rates through May 2019, in chart by Federal Reserve of St. Louis.

There was really a two-way interest rate fix related to the Great Recession of 2008-2009. First, when oil and other energy prices started to spike, the US Federal Reserve raised short term interest rates in the mid 2000s. This, by itself, was almost enough to cause recession. When recession started to set in, short-term interest rates were brought back down. Also, in late 2008, when oil prices were very low, the US began using Quantitative Easing to bring longer-term interest rates down, and the price of oil back up.

Figure 13. Monthly Brent oil prices with dates of US beginning and ending Quantitative Easing.

There is one recession that seems to have been the result of low oil prices, perhaps combined with other factors. That is the recession that was associated with the collapse of the central government of the Soviet Union in 1991.

[10] The recession that comes closest to the situation we seem to be heading into is the one that affected the world economy in 1991 and shortly thereafter.

If we look at Figures 2 and 5, we can see that the recession that occurred in 1991 had a moderately severe effect on the world economy. Looking back at what happened, this situation occurred when the central government of the Soviet Union collapsed after 10 years of low oil prices (1982-1991). With these low prices, the Soviet Union had not been earning enough to reinvest in new oil fields. Also, communism had proven to be a fairly inefficient method of operating the economy. The world’s self-organizing economy produced a situation in which the central government of the Soviet Union collapsed. The effect on resource consumption was very severe for the countries most involved with this collapse.

Figure 14. Total extraction of physical materials Eastern Europe, Caucasus and Central Asia, in chart by MaterialFlows.net. Amounts shown are based on the Global Material Flows Database of the UN International Resource Panel.

World oil prices have been falling too low, at least since 2012. The biggest decreases in prices have come since 2014. With energy prices already very low compared to what producers need, there is a need right now for some type of stimulus. With interest rates as low as they are today, it will be very difficult to lower interest rates much further.

Also, as we have seen, debt-related stimulus is not very effective at raising energy prices unless it actually raises energy consumption. What works much better is energy supply that is cheap and abundant enough that supply can be ramped up at a rate well in excess of 2% per year, to help support the growth of the economy. Suitable energy supply should be inexpensive enough to produce that it can be taxed heavily, in order to help support the rest of the economy.

Unfortunately, we cannot just walk away from economic growth because we have an economy that needs to continue to expand. One part of this need is related to the world’s population, which continues to grow. Another part of this need relates to the large amount of debt that needs to be repaid with interest. We know from recent history (as well as common sense) that when economic growth slows too much, repayment of debt with interest becomes a problem, especially for the most vulnerable borrowers. Economic growth is also needed if businesses are to receive the benefit of economies of scale. Ultimately, an expanding economy can be expected to benefit the price of a company’s stock.

Observations and Conclusions

Perhaps the best way of summing up how my model of the world economy differs from other ones is to compare it to popular other models.

The Peak Oil model says that our energy problem will be an oil supply problem. Some people believe that oil demand will rise endlessly, allowing prices to rise in a pattern following the ever-rising cost of extraction. In the view of Peak Oilers, a particular point of interest is the date when the supply of oil “peaks” and starts to decline. In the view of many, the price of oil will start to skyrocket at that point because of inadequate supply.

To their credit, Peak Oilers did understand that there was an energy bottleneck ahead, but they didn’t understand how it would work. While oil supply is an important issue, and in fact, the first issue that starts affecting the economy, total energy supply is an even more important issue. The turning point that is important is when energy consumption stops growing rapidly enough–that is, greater than the 2% per year needed to support adequate economic growth.

The growth in oil consumption first fell below the 2% level in 2005, which is the year some that some observers have claimed that “conventional” (that is, free flowing, low-cost) oil production peaked. If we look at all types of energy consumption combined, growth fell below the critical 2% level in 2012. Both of these issues have made the world economy more vulnerable to recession. We experienced a recession based on prices that were too high for consumers in 2008-2009. It appears that the next bottleneck may be caused by energy prices that are too low for producers.

Recessions that are based on prices that are too low for the producer are the more severe type. For one thing, such recessions cannot be fixed by a simple interest rate fix. For another, the timing is unpredictable because a problem with low prices for the producer can linger for quite a few years before it actually leads to a major collapse. In fact, individual countries affected by low energy prices, such as Venezuela, can collapse before the overall system collapses.

While the Peak Oil model got some things right and some things wrong, the models used by most conventional economists, including those included in the various IPCC reports, are far more deficient. They assume that energy resources that seem to be in the ground can actually be extracted. They see no limitations caused by prices that are too high for consumers or too low for producers. They do not realize that affordable energy prices can actually fall over time, as the economy weakens.

Conventional economists assume that it is possible for politicians to direct the economy along lines that they prefer, even if doing so contradicts the laws of physics. In particular, they assume that the economy can be made to operate with much less energy consumption than is used today. They assume that we collectively can decide to move away from coal consumption, without having another fuel available that can adequately replace coal in quantity and uses.

History shows that the collapse of economies is very common. Collectively, we have closed our eyes to this possibility ever happening to the world economy in the modern era. If the issue with collapsing demand causing ever-lower energy prices is as severe as my analysis indicates, perhaps we should be examining this scenario more closely.

Note:

[1] There was a higher spike in oil prices in 2008, but averaged over the whole year, the 2008 price was lower than the continued high prices of 2011.





No, we won’t fix climate change…….

28 06 2019

Professor Jordan Peterson explains why the world won’t unite to solve the complex issue of climate change.





Greenwashing at its best……

27 06 2019

From Tim Watkins’ excellent Consciousness of Sheep…….

The same mainstream media that told us last month that we had a “climate emergency” that required urgent action seems determined to lull us back to sleep with a large dose of Bright Green hopium today.  That, at least is the only conclusion one can reasonably arrive at when Jeremy Hodges at Bloomberg informs us that:

“The U.K. will generate more energy from low-carbon sources than from fossil fuels this year for the first time since the Industrial Revolution.

“Wind, solar, hydro and nuclear plants provided 48% of the nation’s electricity in the first five months of 2019, according to the U.K. network operator National Grid Plc. Coal, which made up more than 30% of the mix a decade ago, fed just 2.5% at the end of May.

“Britain has led major economies in decarbonizing its power systems as it exits burning coal for power by 2025 and has installed more offshore wind turbines than anyone else. So far this year, the country has gone without burning coal for around 1,900 hours, the equivalent of 80 days. That included a record-breaking run of 18 full days without the dirtiest fossil fuel.”

Nor is Bloomberg the only cheerleader for the green energy industry.  The BBC’s Roger Harrabin also reports on this apparent feat of green new dealism:

“National Grid says that in the past decade, coal generation will have plunged from 30% to 3%.

“Meanwhile, wind power has shot up from 1% to 19%.

“Mini-milestones have been passed along the way. In May, for instance, Britain clocked up its first coal-free fortnight and generated record levels of solar power for two consecutive days.”

After informing us that this is really important because we need to lower our greenhouse gas emissions, Harrabin repeats the unfounded belief that electric vehicles will take the place of fossil fuels in balancing supply and demand on the basis of the unlikely claim that as a result of yet-to-be-proven “smart technologies” their owners will be happy for the electricity companies to drain electricity from their batteries while the cars are supposed to be charging.

Harrabin, gives the lie to this greenwash in a chart he reproduces from National Grid:

This shows that it is gas rather than renewables that is the dominant energy source in the UK; and is likely to be for many years to come (not least because a large part of Britain’s nuclear power is at the end of its lifespan).  There is also the unasked question as to where “biomass” fits.  A small amount of UK biomass comes from anaerobic digesters which separate methane from manure and decaying vegetation.  The large part, however, comes from the Drax converted coal power station, whose voracious appetite for wood is devastating North American forests, and whose greenhouse gas emissions are higher than the coal plants it is meant to replace.  Put UK biomass in its correct place alongside coal and gas and you falsify the story; carbon-emitting generation continues – albeit by the smallest margin – to outstrip low-carbon alternatives.

In fairness, Harrabin does concede that ‘the electricity sector was seen as the easiest place to start’.  But even this observation may obscure more than it clarifies.  As with everything else energy-related, the deployment of non-renewable renewable energy-harvesting technologies has proceeded on a lowest hanging fruit basis.  The combination of state subsidies and business investment, together with the transfer of manufacturing to Asia helped drive the price of the technologies (but not the necessary infrastructure) well below the cost of fossil fuels (which continue to be essential in balancing loads).  At levels of penetration now seen in several European countries, however, the cost of overcoming the weaknesses inherent in wind and solar power is beginning to accelerate.

Worse still, as the rest of the world seeks to follow the UK’s lead, and as developing states seek to jump straight to non-renewable renewable energy-harvesting technologies; there is growing competition for the planet’s fast-depleting mineral resources.  As Prof Richard Herrington, Head of Earth Sciences at the Natural History Museum warns:

“Over the next few decades, global supply of raw materials must drastically change to accommodate not just the UK’s transformation to a low carbon economy, but the whole world’s. Our role as scientists is to provide the evidence for how best to move towards a zero-carbon economy – society needs to understand that there is a raw material cost of going green and that both new research and investment is urgently needed for us to evaluate new ways to source these. This may include potentially considering sources much closer to where the metals are to be used.”

Herrington is particularly scathing about the assumption that we can simply switch to electric cars over the next couple of decades:

“To replace all UK-based vehicles today with electric vehicles (not including the LGV and HGV fleets), assuming they use the most resource-frugal next-generation NMC 811 batteries, would take 207,900 tonnes cobalt, 264,600 tonnes of lithium carbonate (LCE), at least 7,200 tonnes of neodymium and dysprosium, in addition to 2,362,500 tonnes copper. This represents, just under two times the total annual world cobalt production, nearly the entire world production of neodymium, three quarters the world’s lithium production and at least half of the world’s copper production during 2018. Even ensuring the annual supply of electric vehicles only, from 2035 as pledged, will require the UK to annually import the equivalent of the entire annual cobalt needs of European industry…

“There are serious implications for the electrical power generation in the UK needed to recharge these vehicles. Using figures published for current EVs (Nissan Leaf, Renault Zoe), driving 252.5 billion miles uses at least 63 TWh of power. This will demand a 20% increase in UK generated electricity… If wind farms are chosen to generate the power for the projected two billion cars at UK average usage, this requires the equivalent of a further years’ worth of total global copper supply and 10 years’ worth of global neodymium and dysprosium production to build the windfarms.

“Solar power is also problematic – it is also resource hungry; all the photovoltaic systems currently on the market are reliant on one or more raw materials classed as “critical” or “near critical” by the EU and/ or US Department of Energy (high purity silicon, indium, tellurium, gallium) because of their natural scarcity or their recovery as minor-by-products of other commodities. With a capacity factor of only ~10%, the UK would require ~72GW of photovoltaic input to fuel the EV fleet; over five times the current installed capacity. If CdTe-type photovoltaic power is used, that would consume over thirty years of current annual tellurium supply.”

As demand for these critical minerals increases – especially if, as expected, western governments adopt some variant of a green new deal to offset the gathering economic storm – so too will their price.  This is not lost on science advisors who advise government ministers behind closed doors.  For example, a New Zealand committee established to examine plans for decarbonising the economy has concluded that further decarbonisation of the electricity system is counterproductive.  In a report leaked to Stuff magazine they note that:

“High electricity prices would slow the decarbonisation of the wider economy, making it more difficult for New Zealand to meet its target under the Paris Agreement to cut greenhouse emissions…

“Instead of focusing on 100 per cent renewable electricity generation, the committee urged the Government consider New Zealand’s energy use as a whole, with industrial heat and the transport sectors generating far more in terms of carbon emissions than electricity.”

This problem arises for both households and industry.  Money that has to be spent on the higher electricity bills that have been common around the world is money that cannot be invested to lower consumption.  A household whose electricity bills eat away their disposable income is not in a position to install double glazing, insulate walls and ceilings or swap gas central heating for an electric heat pump system.  In the same way, a business whose profit margins are eaten up with increased electricity bills is not about to invest in expensive energy saving technologies; still less swapping its internal combustion engine vehicles for electric ones.

In this sense, the continued installation of non-renewable renewable energy-harvesting technologies exacerbates an economic trend that is already taking its toll in the UK.  The electricity industry business model is based upon the belief that our demand for energy will continue to grow.  As a consequence of general inflation, wage stagnation and austerity policies, however, Britons are finding it increasingly difficult to pay for electricity.  This has led to a two-fold response.  On the one hand – and celebrated by the bright green lobby – households and businesses have turned to the low hanging (and low-cost) fruit of energy efficiency (installing LED lightbulbs, turning down thermostats, wearing an extra layer, etc.)  On the other hand, and especially among the millions of households experiencing “energy poverty,” people have simply been disconnecting themselves – perhaps not entirely shivering in the dark; but only using that electricity that is considered essential.

One result of this declining energy use has been that the brave new world of open competition envisaged by the UK government has fallen flat on its face.  As a new report from Citizens’ Advice warns:

“British energy customers are facing a potential bill of £172 million from the collapse of 11 suppliers since January 2018. On top of this, thousands of people who owed money to failed suppliers lost out on consumer protections and faced aggressive debt collection as a result…”

New entrants to the market had offered too low a price based on the assumption that their customers would use the saving as a reason to consume more electricity when, in practice, they used the saving to fund shortfalls elsewhere in their budgets.  Meanwhile, the “big six” suppliers – whose near monopoly position was supposed to be broken by the new competitors – are increasingly subsidising their domestic electricity business out of profits from industrial users and from the proceeds of investment in the fossil fuel sector.

There is also a political dimension that it is becoming difficult to ignore.  This was raised by some of the participants of a recent energy discussion reported by Christopher Snowden at the Spectator:

“Phil Graham said that switching gas boilers to zero-carbon alternatives, such as hydrogen, is going to require more money. Charlie Ogilvie (Special Adviser to Claire Perry MP) noted that the government’s goal of getting all homes up to Band C by 2035 will cost between £35 billion and £65 billion. While the lower cost of electrified transport could make up for it, this is still a hard sell. Ultimately, said Andrew Neil, the costs of decarbonisation will be met by ordinary people through higher taxation or higher prices. He named several political parties, including the Australian Labor Party and Macron’s En Marche, that have lost public support in recent months as a result of green policies. With all this top-down planning, could there be a democratic deficit?

“But what about the political backlash? Will there be anger at shareholders getting rich while people pay more? Will there be a call for state ownership?”

Perhaps the biggest problem of all, however, is that for all of the deployment of non-renewable renewable energy-harvesting technologies around the world, our greenhouse gas emissions continue to increase; with only the prospect of a new recession on the horizon to provide temporary relief.  If eye-watering domestic energy prices are a hard sell in their own right to a population whose discretionary income has collapsed since 2008; they are even more so as it becomes clear that they are failing to dent the environmental problem for which they are proffered as the best solution.

Greenwash this any way you like, but the growing difficulties emerging in the UK and Europe as non-renewable renewable energy-harvesting technologies account for a greater proportion of electricity generation can only get worse from now on.  And in the end, the leaked report of the New Zealand Interim Climate Change Committee is far more honest than the green energy lobby in stating what ought to be patently obvious – if our intention is to stop pumping greenhouse gases into the atmosphere, then we need to stop doing all of the things – including economic growth and having babies – that cause greenhouse gas emissions.  We cannot grow our way out of the consequences of growth; but it is easier to brush over this inconvenient truth in bright green paint than it is to take the hard decisions that are now essential.