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A Common Fallacy in the Energy and Climate Debate

Schalk Cloete's picture
Research Scientist Independent

My work on the Energy Collective is focused on the great 21st century sustainability challenge: quadrupling the size of the global economy, while reducing CO2 emissions to zero. I seek to...

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The vast majority of the energy and climate debate takes place in the developed world and, understandably, much of this debate is focussed on the developed world itself. However, as clearly shown in the two figures below, the developed world is already of lesser importance when it comes to energy and climate issues and will continue to rapidly lose significance over coming decades.

Exxon CO2 projection

As shown above, the developed world share of total emissions is projected to fall from 56% in 2000 to only 27% in 2040. The story is very similar for total energy demand in the graph below.

Exxon energy projection

The nature of the energy and climate debate changes completely depending on whether it is viewed from a developed or a developing world point of view. This article will elaborate further on this difference and its implications on the debate itself.

Differing economic growth priorities

In general, the developing world will pursue economic growth at almost any cost while the developed world, for reasons outlined below, has been forced into a mode of just trying to preserve current levels of material affluence and social welfare.

It is obvious why the developing world wants to grow. The average developing world citizen consumes roughly five times less value than the average developed world citizen. A full 2.5 billion people still survive on less than $2/day (an amount of value consumed roughly every 30 minutes by the average developed world citizen). It is therefore no wonder that developing world citizens also want proper housing, cars and the wide range of consumables that people born in developed countries simply take for granted.

As demonstrated by Japan some decades ago (below) and by China more recently, a poorly developed nation can grow very rapidly over an extended period of time through intelligently copying best practices from the developed world. Very rapid catch-up growth can be sustained for decades, but can also slow rather suddenly when a nation runs out of things to copy and has to start innovating. Today, roughly 20% of the world must innovate (developed), while the remaining 80% still has a lot of copying potential (developing).


However, the 21st century has brought an additional very important growth challenge to the developed world: expensive energy. Since global fossil fuel prices quadrupled in the seven years following the turn of the century (below), the energy-intensive lifestyle that is viewed as standard in the developed world has suddenly become a lot more expensive. Energy costs related to a big home in the suburbs (heating, cooling, appliances and commuting) now take a significant chunk out of the disposable income of the average developed world citizen, not to mention the price inflation effects that rising energy costs have on almost all of the other commodities he so liberally consumes.

Fossil fuel price rise

Less disposable income means less spending on other things, leading to unemployment and a drop in asset prices. This, in turn, leads to a further drop in disposable income, thereby completing the vicious cycle. Statistics for real median income and unemployment in the US are given below as an example. It is clear that, despite US federal debt doubling since the crisis and the total amount of quantitative easing (money printing) closing in on $4 trillion, the trends are not good. Note that the better-looking U3 unemployment figure is the headline figure, but the SGS Alternate figure is arguably the real figure counting also long-term unemployed people and those who have simply given up looking for work.

US median income and unemployment

Meanwhile, developed world governments are becoming increasingly insolvent. Debt and other unfunded liabilities (Social Security and Medicare) are growing rapidly and will force significant reductions in developed world growth over coming years through reductions in government spending and increases in taxation. The figure below shows one prognosis for the US.

USA projected budget deficit

Currently, developed nations (particularly the US) can still use the reputation of their currencies to maintain consumption at a reasonable level. In other words, developed nations can exchange dollar or euro denominated paper assets for real goods and services produced by other nations. The persistent trade deficit of the US given below is a case in point. If the US dollar was not the world reserve currency and we had not just had a 3-decade bull market in government bonds, these persistent trade deficits would have devalued the dollar and forced Americans to substantially cut their consumption many years ago.

US trade deficit

It is uncertain how long central banks can keep this highly fragile system stable, but one thing is clear: in the years to come developing world economies will grow and developed world economies will (at best) stagnate. GDP data over the last decade (below) gives a clear example of things to come.

Developed and developing world GDP growth

Differing environmental priorities

In spite of the economic challenges described above, developed world citizens are still many times more affluent than developing world citizens. This implies that the developed world has a willingness to pay for benefits such as cleaner air and reductions in other forms of pollution. The sharp reduction in emissions from US coal-fired power plants is given below as an example.

US emissions reduction

As discussed in a previous article, however, the developing world has very different priorities. Despite pollution levels often reaching truly shocking levels, the developing world still prioritizes economic growth over clean air. For example, it was discussed that non-CO2 externalities in India are viewed to be roughly one order of magnitude smaller than in the US. This is a very important point for developed world citizens to realize. If you were 10 times poorer than you are today, you would most likely also not care that much for pollution from coal power plants as long as it provides the cheap and reliable power necessary for you to better your life.

The case of CO2 is even more complex. If the developing world is unwilling to pay for reducing pollution that has a direct and immediate impact on their daily lives, it is pretty obvious that they are not going to be paying for pollution that will only start having a substantial and clearly attributable impact many years from now. Besides, even though the developing world now emits more CO2 per year than the developed world, they are still far behind when it comes to cumulative emissions. A few examples are given below.

Cumulative and current CO2 emissions

It is therefore clear that all the developed world talk about enormous fossil fuel externalities is purely academic for the part of the world where the majority of fossil fuels is burned. Until the developing world becomes sufficiently rich or the effects of pollution become truly unbearable, economic growth will be prioritized over environmental concerns. This prioritization is fully justified and highly unlikely to change any time soon.

Differing family priorities

If it was not for immigration, the developed world would be shrinking right now. The population of the developing world, on the other hand, is still growing rapidly (below).

Projected population growth by region

The reasons for these trends are fairly obvious. Developed world citizens have much greater access to education and birth control. In addition, while a child in rural areas of the developing world is seen as a major asset (another pair of hands on the farm), raising children in the developed world is a great financial burden, especially within the current economic environment.

Current rapid population growth in the developing world can only be slowed by continued economic development and urbanization, a process that will require enormous amounts of cheap, practical and reliable energy. Since a stable population is the first requirement of a sustainable society, economic development in the developing world must be a top priority, thereby implying that this rapid growth in energy consumption should be encouraged and accommodated by the global community.

What does this mean?

People participating in the energy and climate debate should be very careful of always approaching these issues from a developed world point of view. This view is simply not applicable to the part of the world where the most energy is consumed and the most CO2 is emitted. In fact, two short decades from now, the developing world may very well emit triple the amount of CO2 of the developed world.

It is vital that we accept the objective reality that developing world citizens will not prioritize pollution reduction (CO2 and other) over economic growth unless it is very cheap and highly practical. Clean solutions need to come pretty close to a steady, dispatchable coal-fired electricity supply at $0.04/kWh, practical and reliable new cars at $10000 apiece, and direct industrial heat at $0.01/kWh (coal at $70/ton).

Realistically, this implies CCS-ready fossil fuels, nuclear and large hydro for electricity, a great focus on more efficient internal combustion engines and hybrids for transportation and CCS-ready direct industrial applications. The green dream of solar panels, wind turbines, batteries and EVs quite simply is nowhere close to being able to facilitate rapid developing world growth (see this previous article for example).

In addition, the green dream is still just a dream even in the developed world (non-hydro renewables provide only 3.1% of OECD energy), implying that decades of typically slow trial and error are still required before this largely theoretical world of distributed and intermittent electricity generation, intercontinental super-grids, smart demand management and large-scale energy storage can become a reality. The developing world doesn’t want slow trial and error, it wants proven systems that can drive rapid growth on a very large scale right now. 

Unfortunately, the developed world has neglected CCS and is abandoning nuclear, thereby leaving renewables as the only clean energy alternative that can be copied by developing nations. Given this state of affairs, it should come as no surprise that traditional energy sources accounted for fully 96.1% of the non-OECD energy consumption increase from 2011 to 2012 – a value very similar to the 96.5% average over the past 5 years.

Realistically speaking, if the developed world wants to make a real contribution, it should develop and mature clean energy technology that can be seamlessly integrated into the traditional energy systems currently being copied and expanded rapidly by developing nations. CCS is arguably the most important of these with fourth generation nuclear as an important longer-term prospect. It is also important that the developed world curbs its current anti-nuclearism so that this resistance does not prevent the buildout of third generation nuclear in developing nations. 

Yes, the green dream is ideologically extremely attractive, but, as this article has hopefully demonstrated, it is simply not compatible with billions of developing world citizens flocking to megacities in search of higher living standards. The premature pursuit of this dream will do little other than sustain the rapid increase of CO2 emissions in the developing world while further worsening the already highly fragile economic situation in the developed world. There really is no need to make things so hard for ourselves. 

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John Murray's picture
John Murray on Sep 10, 2013

The claim that renewable energy is too expensive is out-of-date propaganda. We need to help the poorer nations generate clean energy. For their own future and the rest of the planet’s as well.

Thom Westergren's picture
Thom Westergren on Sep 10, 2013

Thanks for covering this important and neglected topic. Good work tracking down all that data. Who knew this information was out there? Thanks for making it available.

One writing suggestion, if I may. Please spell out your acronyms with their first appearance in the article. It should not be assumed that all readers live in your world and are familiar with the acroymns you encounter. For example: OECD was prevalent both in the article and on the charts, yet was never spelled out. It can easily be found with a search, but CCS can not, and ICE turns up well over 100 definitions. It would help your readers immensly if the information were included right in the article.

Again, thanks for helping us stay informed.

Thom Westergren's picture
Thom Westergren on Sep 10, 2013

John, in my book, it’s hard to beat free—and clean—fuel, no matter how you do the calculations. As you suggest, opportunity costs may be the largest factor of all.

Schalk Cloete's picture
Schalk Cloete on Sep 11, 2013

Thanks Thom, I have now updated the article to spell out the CCS and ICE acronymns. 

Schalk Cloete's picture
Schalk Cloete on Sep 10, 2013

I am also of the opinion that a revenue neutral carbon tax would be a very good thing. Such a tax would be a technology-neutral signal to the free market to reduce CO2 emissions in the most cost-effective manner. Current technology forcing through renewables, on the other hand, is ensuring that we abate CO2 in the slowest, least practical and most expensive way possible. It is not helping anyone other than those who have taken advantage of generous government feed-in tariff deals and now get paid by their fellow taxpayers to house some solar panels on their roofs. 

The only problem is that it will probably still be many years before we see such a global CO2 price put in place. And yes, the current renewable energy technology forcing is only delaying this further by weakening the economies of the rich world (through expensive electricity) and by appeasing the ideologically driven greens through some token wind and solar deployment (currently contributing 1.1% of global energy). 

Schalk Cloete's picture
Schalk Cloete on Sep 10, 2013

The link above is focussed on the USA – a highly developed nation. The whole point of this article is that approaching the energy and climate debate from a developed world point of view gives a very narrow perspective, a perspective perfectly illustrated by the referenced site.  

Here are some energy stats from the USA that might be of interest: Super-hyped solar PV currently supplies a grand total of 0.17% of US electricity. Wind, having been steadily deployed over two decades of generous subsidies, stands at 4.8%. (source)

The US is therefore still far from where Germany currently stands (8.2% wind and 5% solar). If you read the very informative Der Spiegel article linked by Willem above, you will see that this relatively minor renewable energy contribution is causing 300000 German households to lose electricity access every year due to very high electricity prices. Electricity is becoming a luxury good. If this is the effect that renewable energy technology forcing has on industrial powerhouse Germany, what do you think will be the effect on the developing world?

Roger Brown's picture
Roger Brown on Sep 10, 2013

In general, the developing world will pursue economic growth at almost any cost while the developed world, for reasons outlined below, has been forced into a mode of just trying to preserve current levels of material affluence and social welfare.

…Meanwhile, developed world governments are becoming increasingly insolvent. Debt and other unfunded liabilities (Social Security and Medicare) are growing rapidly and will force significant reductions in developed world growth over coming years through reductions in government spending and increases in taxation. 

Your program of simultaneous increases in taxes and decreases in government spending cannot possibly work without substantial underlying economic growth. You are proposing using growth to pay down debt. Without underlying growth your program will lead to a consumer spending/unemployment death spiral. If by some miracle your strategy works and a few decades from now the OECD nation have reduced their debt loads to a reasonable level and the developing world is close to catching up with our levels of consumption, nothing will have been done to change the underlying logic of financial capitalism which constantly exerts pressure to increase production and consumption.

The idea that the focus of an economic system serviced by widely used exchange currencies should be on the maintenance of reasonable standards of living rather than on economic growth is an excellent one, but such a development requires significant changes in the social contract and the removal of political power from private credit markets. Debt in the physical sense of resources spent in the present which provide a payoff in goods and services over a long period of time in the future will still exist. But new ways of creating and managing debt which do not require growth in the total output of goods and services must be developed.


Of course it is unreasonable for the developing world to agree to freeze their resource consumption at a level far below that of the OECD nations. However a commitment to ‘growth at almost any cost’ toward current OECD standards of consumption will make difficult to keep a significant amount of economically available fossil carbon out of the atmosphere. The development of a more or less universally accepted standard of economic sufficiency is primary requirement of any serious attempt to combat the deteriorating effects of human economic activity on the environment. The fact that this common sense idea cannot be discussed is strong evidence of the irrationality of our commitment to outdated cultural norms.

Nathan Wilson's picture
Nathan Wilson on Sep 11, 2013

Great post.  However, I would suggest a modification to this statement:

“…developed world wants to make a real contribution, it should develop and mature clean energy technology… CCS is arguably the most important of these with fourth generation nuclear as an important longer-term prospect.”

I would argue that the most important clean technology is domestically built Gen III nuclear in China and India.  As described by the World Nuclear Association, prior to the Fukushima accident, China was ramping up production of the CPR-1000, which is derived from an old French Gen II reactor, which they estimated would cost $2.3/W.  They now prefer to use safer and more modern Gen III derivatives (localizations) such as the CAP1000 (derived from  the Westinghouse AP1000, they are currently building four of the Westinghouse version).  The AP1000 version  costs around $2.6/W, and the Chinese CAP1000 version is expected to cost $2.1/W as production volumes ramp up.

Chinese nuclear technology has the potential to undercut the price of coal, especially when carbon-capture is included, and the Chinese are not as anti-nuclear as the fossil-fuel-rich western countries.

India is currently suffering from more Western-style (imported?) anti-nuclearism, but attitudes can change over time.

In short, not only do our (western) emissions not matter much, but our technology does not either (now that we have signed-over the rights to the AP1000-derived technology).

Schalk Cloete's picture
Schalk Cloete on Sep 11, 2013

I completely agree that harsh austerity can trigger the deflationary death spiral, but, as that figure about US government revenues vs outlays clearly illustrates, keeping current levels of government spending and taxation is obviously not an option. 

The west is at a critical stage right now – a stage where the Ponzi scheme of exponentially rising population, resource usage and welfare benefits is starting to unravel. As with the unraveling of any Ponzi scheme, there will be substantial economic pain (austerity). This, I think, is inevitable. 

However, the developed world has now been in no-growth mode for essentially 6 years. If you believe alternate inflation data such as that reported on Shadowstats, developed world economies have been shrinking in real terms for quite some time now. Personally, don’t think inflation is as high as suggested by Shadowstats, but I also think government numbers somewhat under-report real increases in the cost of living. Anyway, the point is just that the past decade or so has shown that our economic systems are surprisingly resilient in the face of stagnant/negative real growth. 

Theoretically, all that is needed for our current systems to survive is that nominal GDP keeps on growing. This will allow people to keep on paying their debts, thereby keeping things relatively stable. However, since real GDP will be stagnant or slowly falling, so wil real disposible incomes. This will have the good spin-off that developed world citizens will be much more careful about going into debt, only taking on debt that can help them produce more value in the future instead of the amazing amount of consumer/speculation debt taken out during the buildup of the housing bubble. 

The danger is of course that this environment of rising nominal GDP, but stagnating/falling real GDP (stagflation) can lead to outcomes such as large-scale social unrest or even a loss of confidence in major currencies as a store of value (hyperinflation). These are the scenarios that governments and central banks are currently working to prevent through their extraordinary monetary policies. I have no idea how this will turn out, but the people in charge have proven over the years that, even though they are useless at long-term planning, they are very good at short-term crisis management. 

The complete revamp of our socio-economic systems that you hinted at can, in my opinion, only happen after a truly dramatic global event (e.g. collapse of the dollar/euro or a major resource war). I definitely hope that we can avoid such a terrible outcome. Anyway, I think we will really need capitalism in order to uplift the developing world and build out clean energy resources over coming decades. Despite its flaws, capitalism is an excellent system for getting things done. 

Schalk Cloete's picture
Schalk Cloete on Sep 11, 2013

As you pointed out, Gen III nuclear has already been matured by the developed world and copied by the developing world, hence I think my statement is accurate. 

However, I appreciate your point and have added the following sentence right after the passage that you quoted: “It is also important that the developed world curbs its current anti-nuclearism so that this resistance does not prevent the buildout of third generation nuclear in developing nations.”


Schalk Cloete's picture
Schalk Cloete on Sep 11, 2013

Personally, I try to keep an open mind about the possibilities of future economic development. I think it is quite clear that the billion or so richest people on the planet (responsible for well over half of all resource consumption) will have to reduce their environmental footprints substantially (and will probably be forced to do so by global markets), but we have to be open to the possiblility that our planet can provide the increased resources required to uplift the remaining 6 billion if we work smartly. 

Technology definitely has a large role to play here. A lot can be done to increase the efficiency of resource consumption and to affordably access additional fossil fuels in a more environmentally benign way (FFs still provide 87% of our energy consumption and has been at this level since finally dropping below 88% in 1991) . Perhaps we might even see the long-awaited true breakthrough in nuclear (e.g. Gen IV) or renewables (e.g. organic PV). Who knows? The Malthusian viewpoint has been proven wrong before because people at the time did not recognize how much could be done with conventional fossil fuels. One has to acknowledge the possibility that history can repeat itself. 

I do, however, appreciate your viewpoint that very large reductions in the human footprint might be the only way out. I have spent a lot of time studying the interconnected sustainability crisis we face today and the number of unsustainable trends in our environment, our economy and our society is truly staggering. If one has a good understanding of non-linear system dynamics, the number of ways in which this interconnected system can diverge is enough to give many sleepless nights. I have also spent a lot of time studying the connection between consumption and life satisfaction and concluded that consumerism truly is stupid on every level. 

On the other hand, I also fully appreciate the power of the information age we live in today. As a research scientist, I am constantly in awe at the amount of valuable information at my fingertips. The basic idea of research is to look again (re-search) and establish new connections and ideas that were not recognized before. The rate at which the world can now uncover such new ideas and virtually evaluate them (through simulation) is truly astounding and one almost has to expect something truly wonderful to pop up sooner or later. 

I therefore try to stay positive and open to new ideas, even if it is only because all the practically feasible routes I see towards your prescription of a massively reduced human footprint are very unpleasant indeed. 

donough shanahan's picture
donough shanahan on Sep 12, 2013

And that is only electricity. For example the UK only get about 10% of its energy from electricity. Gas makes up 45% of its total energy use.

Michael Hogan's picture
Michael Hogan on Sep 13, 2013

There’s one relatively important little fly in this ointment. One should stop and think long and hard before swallowing whole the idea that safe nuclear power plants that cost $10-12/W to build in the developed world (and all available evidence is that’s what it costs) can be built for $2.3/W to build in China, India or elsewhere in the developing world. That’s not an anti-nuclear rant, its a common sense word of caution. I agree we need to have an open mind about what the right solution to this shared challenge is, for everyone involved, but proposed solutions need to be built on honest assessments of ALL options, including those options one might be inclined to favor. On the available hard evidence, luring developing world consumers into believing that nuclear and CCS connected to large centralized grids will be a safe, economic answer to all their dreams is no less irresponsible than the claims of those you dismiss as “green dreamers.”

Mike Barnard's picture
Mike Barnard on Sep 13, 2013

I continue to be amused that the CCS guy ignores the complete and utter lack of economic value (outside of EOR which has its own problems) of CCS and slams the strong economic value of renewables. 

Just don’t burn fossil fuels and life becomes much better for all concerned. Oddly, that’s what’s really happening.

Brian Reynolds's picture
Brian Reynolds on Sep 13, 2013

This is not a serious article.  You’re making all kinds of assumption errors that range from the causes of unemployment (energy isn’t one worth mentioning here) to what people value (“the developed world has a willingness to pay for benefits such as cleaner air” …come on).

And you ignore and debase human equality when you assume that developing nations can’t see the forest for the trees regarding the consequences of climate change.  These just aren’t serious arguements because they lack a holistic view of the problem and intellectual honesty for causes and effects.

Alain Verbeke's picture
Alain Verbeke on Sep 13, 2013

” If you were 10 times poorer than you are today, you would most likely also not care that much for pollution from coal power plants as long as it provides the cheap and reliable power necessary for you to better your life.”

1 350 000 001 Chinese people disagree with your moronic bureaucrat statement. But their dictatorial government does not want to listen to them, given that they control the weapons and have no qualms putting a bullet into the head of anyone who disagree with their views …..

June 16, 2013. The capital Beijing earlier this year saw levels of particulate matter in the air reach almost 40 times World Health Organization limits, as other cities in China were hit by high levels of pollution, provoking outrage nationwide.

Air pollution contributed to 1.2 million premature deaths and 25 million healthy years of life lost in China in 2010, the US-based Health Effects Institute reported in March, basing its figures on a global survey published in British medical journal The Lancet.

September 10, 2013. Development banks worldwide lent a record $108.9 billion to renewable energy and energy-efficient technology last year as they scale back investment in coal-fired power plants, Bloomberg New Energy Finance said. Development banks furnished $424.8 billion of clean energy finance between 2007 and 2012, according to the report. About half of that was disbursed in Europe, excluding Russia.

The Geothermal Energy Association recently released a new report showing continued strong growth signals in the international market for geothermal power.

By the end of 2013 the global geothermal market is expected to operate 12000 MW of geothermal capacity on-line. There are 11766 MW of new capacity in early stages of development or under construction in 70 countries and territories around the world.

Additionally, developers are actively engaged with and exploring 27000 MW of geothermal resource globally that could potentially develop into power plants over the next decade.

This year some of the first demonstration Enhanced Geothermal System (EGS) projects provided electricity to grids in Australia and the United States.

Countries such as Uganda, France, Tanzania, Chile, and Rwanda have geothermal projects under construction or in the latter stages of development and will have their first operational geothermal power plants within the next few years.

In Kenya, 296 MW of the over ~1000 MW of geothermal under development are physically under construction.

Indonesia has almost 4100 MW in the pipeline for development and 860 MW physically under construction.

For more information about the EXPO, go to:

September 11, 2013. Chile’s Road To Solar Grid Parity. High electricity prices ($0.15-0.25/kWh), high irradiation, and rising energy demand all play in Chile’s favor. A third of the overall country is hydro-based, but almost all of it is in the south. Most of the coming solar capacity will be in the north which is currently dominated by hydrocarbon generation (45 percent coal, 8 percent oil), as opposed to the central’s nearly 50 percent hydro portfolio. Only 3 solar projects with 3.5-MW grid-connected capacity are currently operating in Chile; 70 MW of projects are under construction, and there’s a 3100 MW pipeline backlog. Most projects are debt-heavy (70-80 percent), but equity-funded solar installations achieved permitting to generate LCOEs of $0.12-$0.18/kWh, cost-competitive with other forms of energy generation. Chile’s mining sector produces a third of the world’s copper, representing more than half the country’s annual exports and a fifth of its GDP. Mining companies have been signing long-term solar PV PPAs in the $100-120/MWh range, which is competitive with gas (~$120s/MWh) and coal (~$80s/MWh), with no commodity risk. All these factors point to increasing investment in large PV projects. An early example of Chile’s solar grid parity: SunEdison’s 50-MW project in the Atacama region, with a projected cost of $142 million (helped by World Bank funding), and generating electricity at an LCOE of $0.12/kWh using mostly equity financing — and selling into the spot market without incentives.

Alain Verbeke's picture
Alain Verbeke on Sep 13, 2013

” I am also of the opinion that a revenue neutral carbon tax would be a very good thing. Such a tax would be a technology-neutral signal to the free market to reduce CO2 emissions in the most cost-effective manner. Current technology forcing through renewables, on the other hand, is ensuring that we abate CO2 in the slowest, least practical and most expensive way possible. It is not helping anyone other than those who have taken advantage of generous government feed-in tariff deals and now get paid by their fellow taxpayers to house some solar panels on their roofs. “

if you believe that by writing such crap, you will gain legitimacy, then I have good news for you: you are making a fool out of yourself.

I pay 59% taxes on my income, and do not get 59% benefits from those taxes, since we are in perfect health, live frugally, and do save a lot so that we won’t have to depend on a meager government pension payment once its time to retire. The country we live in (Belgium) imports 100% of it’s fossil and nuclear fuel since the 70’s. All were rising in price year after year after year, if I read my electricity bills from Electrabel up until 2004. The EU also voted for the Kyoto Protocol, putting an added CO2 tax on my grid electricity bill, which became even more expensive. Then the EU ordered the liberalisation of the European electricity markets, freeing it for private consumers starting from 2004, corporate consumers being able to switch since 2000. I switched to a cooperative (EcoPower cvba) in 2004 because they promised 100% renewable sourced electricity to my home, through the grid, and they would be much cheaper than my current Electrabel utility. They asked me to become a member of their cooperative by buying a share for $250. I became a member, and got a 6% dividend on that $250 each year. In 2004 we were less than 5000 users, today in 2013 we are more than 100 000. My electricity bill instantly became 20% cheaper, no fossil fuel import duty taxes, no CO2 taxes, no fossil fuel and nuke waste recycling taxes anymore, because I used 100% renewable sourced electricity produced 100 clicks around where I lived, that was just put on the existing grid. In 2010, I put solar PV panels on my home roof, a 4kW plant, getting a FiT subsidy for doing that. The government gave us a once in a lifetime opportunity to use their services and being paid for it, so I didn’t refuse the offer. Remember, I pay 59% taxes on my income and do not often use government services. The FiT system is now almost canceled, new solar PV installation in 2013 are basically not FiTted anymore over here, and by 2015 it is completely over. The FiT that I receive is $1000 a year, for the next 20 years, then it stops. I pay $350 per year to my grid supplier for use of the grid at night, when my home solar PV panels are not producing, and this till I die. I paid 100% of the PV installation installation cost, no rebates excepted $2700 in income tax reduction on my 59% taxes. I now pay zero for my electricity consumption and the plant wil be paid off in 2020. Without the FiT it would be 2027, if FF and nuke grid supplied electricity prices stay the same as today. They won’t, we import it all, and it gets more expensive year after year after year. So even without a FiT, I would have done it, because grid electricity prices only go up, while my solar PV panels production is capping it all at a fixed price of $20 cents/kWh up until the plant is paid off, after which it becomes 0 cents/kWh. This $20cents/kWh is today in 2013 already cheaper than Electrabel’s FF and nuke power supplied by the grid ($22 cents/kWh for retail users). Belgium now imports 12% of it’s electricity from Germany, who has a constant surplus, selling it to “us” for peanuts, which of course discourage the construction of new local FF or nuclear plants, given the cost of capital… My solar PV panels are guaranteed for the next 20 years, they will last 40 years, given how sturdy the EU manufactured panels are assembled, and given that there are zero moving parts, no tornadoes, hurricane and such endeavours to destroy them in Belgium. I will lose 0.5% in production capacity each year due to “lost silicon electrons”, meaning in 20 years, they will produce 0.005×20= 10% less than now. I do not need no stinking NPP or fossil fuel in my backyard. I have solved it otherwise. YES, IT IS EASY FOR YOU TO CRAP ON RENEWABLES, AFTER ALL YOU ARE HIDDING IN A GOVERNMENT PAID RESEARCH JOB ON CLEAN COAL BURNING, ANOTHER PIPE DREAM PAID FOR BY TAXPAYERS TAXES. YOU CLEARLY ARE NOT HAVING MUCH WORK GIVEN THE WHOLE LOAD OF CRAP ARTICLE YOU ARE PUBLISHING ON THIS WEBSITE……

“Current technology forcing through renewables, on the other hand, is ensuring that we abate CO2 in the slowest, least practical and most expensive way possible. It is not helping anyone other than those who have taken advantage of generous government feed-in tariff deals and now get paid by their fellow taxpayers to house some solar panels on their roofs.”

IEA stunner: global subsidies to dirty energy top $550 billion a year. The IEA estimates that energy consumption could be reduced by 850m tonnes equivalent of oil — or the combined current consumption of Japan, South Korea, Australia, and New Zealand — if the subsidies are phased out between now and 2020. The consumption cut would save the equivalent of the current carbon dioxide emissions of Germany, France, the U.K., Italy, and Spain. Fossil fuel subsidies average out to 2.1% of GDP of the 37 countries surveyed.

April 15, 2013. Portugal Achieves 70 Percent Renewable Energy in First Quarter, hydropower supplied most: Hydroelectric power supplied 37 percent of total electricity, Wind energy represented 27 percent of the total share.

January 26, 2011 – Roundup of Hydro Activity. Europe is the region of the world with the highest installed capacity of hydroelectric generation, according to the International Hydropower Association’s (IHA) latest available figures. The report says that the EU accounts for about 260 GW of the estimated global total of 860-950 GW of hydro generation.

March 25, 2011 – The German Ministry for the Environment and Reactor Safety reports that in 2010 renewable energy from wind turbines, hydroelectric plants, solar cells, and biogas digesters generated more than 100 TWh of electricity, providing nearly 17 percent of the 600 TWh of supply.

May 28, 2013. Morocco on May 10th officially launched the construction of a 160-megawatt solar power plant near the desert city of Ouarzazate, the first in a series of vast solar projects planned in the country. Meanwhile the country is also ploughing ahead with a programme to boost wind energy production, particularly in the southern Tarfaya region, where Africa’s largest wind farm is set to open in 2014.

The kingdom, with no hydrocarbon reserves of its own, hopes to cover 42% of its energy needs with renewable sources by 2020, and has launched a plan to produce 4,000 megawatts.

Half of this will come from solar energy while wind power will supply the remaining 2,000 MW, and Morocco’s wind-blown southern coast, where many of the new farms will be built, already resembles a huge building site.

September 11, 2013. Chile’s Road To Solar Grid Parity. High electricity prices ($0.15-0.25/kWh), high irradiation, and rising energy demand all play in Chile’s favor. A third of the overall country is hydro-based, but almost all of it is in the south. Most of the coming solar capacity will be in the north which is currently dominated by hydrocarbon generation (45 percent coal, 8 percent oil), as opposed to the central’s nearly 50 percent hydro portfolio. Only 3 solar projects with 3.5-MW grid-connected capacity are currently operating in Chile; 70 MW of projects are under construction, and there’s a 3100 MW pipeline backlog. Most projects are debt-heavy (70-80 percent), but equity-funded solar installations achieved permitting to generate LCOEs of $0.12-$0.18/kWh, cost-competitive with other forms of energy generation. Chile’s mining sector produces a third of the world’s copper, representing more than half the country’s annual exports and a fifth of its GDP. Mining companies have been signing long-term solar PV PPAs in the $100-120/MWh range, which is competitive with gas (~$120s/MWh) and coal (~$80s/MWh), with no commodity risk. All these factors point to increasing investment in large PV projects. An early example of Chile’s solar grid parity: SunEdison’s 50-MW project in the Atacama region, with a projected cost of $142 million (helped by World Bank funding), and generating electricity at an LCOE of $0.12/kWh using mostly equity financing — and selling into the spot market without incentives.



Schalk Cloete's picture
Schalk Cloete on Sep 13, 2013

Have you ever tried to make a living on $2/day? Have you ever directly observed the terrible vicious cycles of poverty in action (e.g. born poor => very limited education => very limited opportunities in life => poor/reckless family planning => many more poor children with no future (and sometimes HIV as well))? I have grown up in South Africa and observed these cycles first hand. The violence, intolerance, hopelessness and lack of human dignity brought by these cycles are truly heartbreaking.

My previous article presented a graph showing that the incredible energy buildout in China (mostly coal) reduced the number of Chinese people living on $1.25/day or less from from 84% in 1981 to only 13.1% in 2008 – a truly incredible achievement. As a result, China is now a major world power and has the opportunity to achieve self-sustaining economic development.

Yes, of course there are environmental repurcussions from burning 50.2% of the world’s coal on 6.4% of the world’s land area, but I think that the incredible poverty reduction brought by coal in China greatly outweighs these negatives. 1.2 million premature deaths certainly is a lot, but, to put things in perspective, roughly the same number of Chinese die from smoking each year.

Your other articles are rather typical uncritical renewable energy advocacy. Renewable energy investment has fallen in 2012 primarily due to an unstable policy environment in the developed world. Also, considering that energy is about 8% of the global economy (close to $6000 billion) renewables are still very small. An additional reality check: Oil, coal & gas share of total energy in 1995: 86.85%. Oil, coal & gas share of total energy in 2012: 86.85%. (BP Statistical Review)

Geothermal and biomass contributed a mere 0.79% of global energy in 2012. On a global scale, geothermal will have a negligable effect on the energy and climate issues we face today (in certain isolated cases, it can have a substantial positive impact on a regional scale though).

Yes, PV is great at low penetrations in places with very high electricity prices and good solar insolation. However, problems with the intermittency already arise at very low penetration levels and these problems are very expensive (and time consuming) to overcome. 

Schalk Cloete's picture
Schalk Cloete on Sep 13, 2013

It would be interesting to discuss a little further about this. Sure, expensive energy does not directly cause unemployment, but it reduces economic growth (through reducing the discretionary spending potential of consumers) which, in turn, results in unemployment (especially in the developed world where a very large portion of jobs is in discretionary sectors).

Developing nations typically impose a wide range of regulations and standards to control air quality and other forms of pollution. Naturally, it is cheaper not to have such regulations (cheaper infrastructure and less bureaucracy), but developed nations can afford this. The horrible air quality and other forms of pollution in many developing nations clearly shows that such expensive regulations are not being enforced in countries where a very large amount of economic growth is still required to lift millions of people out of abject poverty. 

I’m not trying to say that developing nations don’t understand climate change, I’m just saying that developing nations will most probably be even more reluctant than developed nations to put a meaningful and sustained price on CO2 (and that they have every reason to be so). 

Schalk Cloete's picture
Schalk Cloete on Sep 13, 2013

It is not useful to try and compare the value of CCS with the value of renewables. One should compare the value of fossil fuel infrastructure (still providing 87% of our total energy (unchanged from the early nineties)) with CCS to the value of renewables. When accounting for the intermittency of solar and wind, fossil power stations with CCS have much greater economic value. When looking at direct industrial use of fossil fuels (roughly a third of total use), renewables are not even in the same ballpark. 

Michael Hogan's picture
Michael Hogan on Sep 14, 2013

Nonsense. Of course it’s useful to compare the value of CCS with the value of renewables. And in fact it has been done, by a range of reputable, main stream experts who are far more qualified than you to opine on this matter. Do your research and then come back to us. I’ll give you a hint: transitioning to a system that works quite well, thank you very much, with a high share of renewables (up to 80% at least) can be done at roughly the same cost as proceeding through the next 20-30 years under business-as-usual and with the same level of service reliability. You can start with the US Department of Energy’s Renewable Energy Futures study published last year, you can move on to the Roadmap 2050 study in Europe by McKinsey & Co., KEMA, Imperial College London and the European Climate Foundation. After that there are probably dozens of less robust but nonetheless quite good studies that come to the same conclusion. Could the transition be more expensive and present risks to reliability? Sure. But there are a number of readily feasible and low-cost decisions we can make now that would make it all quite affordable and reliable. Your assumptions, in other words, are path-dependent, and choosing a different path is entirely within our gift.

Oh, and by the way, if you want expensive power, try nuclear at 15 cents/kWh. That’s what it costs, and the 55 year history of the nuclear industry would suggest that it’s never coming down, because it has only ever gone in one direction – up – despite years of experience, scale, technological maturity, regulatory reform and design improvements. Of course nuclear can and should be part of the global picture, but you’re just kidding yourself if you think it’s not expensive power.

Schalk Cloete's picture
Schalk Cloete on Sep 14, 2013

A few points:

1. Your references to 80% RE scenarios are for the US and Europe, thereby directly proving the central point of this article. By 2050, the US and Europe will be of rather low significance in global energy and climate issues. 

2. The NREL study relies greatly on onshore wind (about half of the non-hyrdo renewable generation by 2050). The US is unique in its excellent onshore wind resources (interior US) which currently achieves real-world capacity factors of 38%. Other countries are not as lucky and the current global wind energy capacity factor is 22.7% (BP Statistical Review data). High capacity factor onshore wind is actually a pretty attractive investment not only because high capacity factors greatly increase the amount of power produced for a fixed capital investment, but also because high capacity factors substantially reduce the issues surrounding intermittency. The US wind capacity factor has been stagnant at just over 30% over the past decade, but, for some unknown reason, the NREL study based its calculations on wind capacity factors from 35-46%. This would create a much more favourable scenario.

3. The NREL study derives a very large portion of electricity from biomass plants (about 25% of non-hydro renewables). Biomass is great in the sense that it is used to generate dispatchable thermal power, but this is likely to have great environmental impacts and the study itself admits that “among the many limitations of the present analysis is an incomplete assessment of the impacts of biomass energy crops”. It is hard to see the environmental impacts of biomass plants being smaller than that of fossil fuel plants with CCS. 

4. The NREL study assumes that electricity demand will remain flat between now and 2050, implicitly implying that fossil fuels continue to dominate direct industrial and transport sectors (generally about two thirds of fossil fuel consumption). 80% of electricity from renewables in 2050 would therefore only displace a limited amount of fossil fuels.

5. The 2050 roadmap study is much less comprehensive than the NREL study. It does consider the total energy system (not just electricity) and it does include large amounts of CCS, but it appears to be rather superficial. However, real-world developments after this EU study was published can give a better indication. The current electricity price issues in Germany described recently by a Der Spiegel article linked by Willem Post below gives a good summary. 

6. You can also find many expert views stating that the green dream of an incredibly rapid renewable energy buildout that will affordably mitigate climate change is not going to happen. If you have access to journal papers, you can check out this study or this one on the fundamental EROI challenges faced by renewables. About the speed of the transition, Vaclav Smil is the leading authority and presents many sound arguments on just how much time such transitions take even if the resource being transitioned to is much more practical than incumbants (not the case for RE). The fact that the global fossil fuel contribution has remained dead-flat at 87% over the past two decades despite tons of hype about alternatives is a case in point.

About nuclear, I am fairly neutral. My primary argument is that the transition away from fossil fuels is going to take a very long time and that renewable technology forcing will only make things worse by delaying meaningful CO2 mitigation, weakening the economic capacity to decarbonize the economy and slowing the development of developing nations (necessary to stop population growth). 

Michael Hogan's picture
Michael Hogan on Sep 14, 2013

Now I’m really left wondering what exactly the point of your article was. Are you saying we should just not worry about it and carry on as we are? If you’re “neutral” on nuclear (a fairly remarkable statement given what you say in your article) and think that renewables only make the situation worse, what is your proposal? You seem to be determined to prove how much bloody cleverer you are than everyone else in this discussion, but your cleverness does not seem to extend to a sustainable strategy for the way forward.

Mike Barnard's picture
Mike Barnard on Sep 14, 2013

As far as I can tell, his point is that his area of expertise — carbon carbon capture and sequestration — combined with burning all of the remaining fossil fuels is the only path forward.

He’s right in part because of people like him pretending that a massive renewables build out isn’t a far superior choice.

Smart people are the enemy of intelligent approaches, and he is smart, if not wise.

Michael Hogan's picture
Michael Hogan on Sep 14, 2013

As a former senior power industry executive for several decades, I’ve been laboring in this “sustainable energy” vineyard for the past 5 years or so in an attempt to find a sustainable way forward, and one of the conclusions I’ve reached is that the ground is littered with clever people who are happy to cherry-pick data to prove that all but their own favored prescription for the way forward are hopelessly [     ] (you fill in the blank – technically impossible, prohibitively expensive, totally unreliable, etc. etc.). Here’s the problem – there are no easy solutions – not renewables, not carbon capture and storage, not nuclear and certainly not natural gas. There are, however, solutions, and the alternative (not moving ahead with a feasible solution) is simply too morally indefensible to contemplate. This fellow’s favored solution, apparently, is carbon capture and storage. Nothing wrong with CCS, except that it’s no more technically feasible, no cheaper, and no less fraught with all sorts of risks than are any of the other “pure play” solutions. We have no choice but to “force” renewable development, just as we have no choice but to try to advance carbon capture and storage technology. We have to find a way out of this ecological dead end called unabated combustion of fossil fuels.

Schalk Cloete's picture
Schalk Cloete on Sep 14, 2013

Firstly, I want to assure you that I have no ego invested in these discussions. My short research career to date has taught me that ego is the number one enemy of good research and I will not compromise the development of my understanding in that way. I’m sorry if I came across as smug in some way or another. That was definitely not my intention. 

This article simply says that fossil fuels and the centralized power systems through which they are generally deployed will still power our society for many decades into the future (the developing world in particular). I think that denying this reality can be very dangerous because it will neglect mechanisms through which this continued fossil fuel dominance can be accommodated more safely (e.g. CCS, cleaner and more efficient power plants (e.g. IGCC), more efficient ICEs (and hybrids), fossil fuel energy conversion (e.g. natural gas reforming with CCS) and various forms of CO2 utilization).

The part about the developed world needing to curb its anti-nuclearism was included in response to a comment from Nathan Wilson (below) – a commentator whose opinion I greatly respect. 

Schalk Cloete's picture
Schalk Cloete on Sep 14, 2013

I do think that burning most of the economically extractable fossil fuel resources is the most likely scenario. Nothing can beat fossil fuels in terms of practicality (implicit highly concentrated energy storage neatly packaged in solid, liquid and gaseous forms), the economics (most fossil fuels can still be extracted for less than half of current market prices), and the energy payback time (oil that is pumped out today can be employed immediately to facilitate economic development while the energy from a solar panel deployed today will only be released over 30 years). 

As stated above, I think that denying the high likelihood that the world will be powered primarily by fossil fuels for many decades into the future is very irresponsible because it will prevent the development of solutions to utilize these resources in a more environmentally friendly manner. 

Schalk Cloete's picture
Schalk Cloete on Sep 14, 2013

I agree with you that an “all of the above” strategy is required. However, this has to be technology-neutral in that the policy landscape should simply give a clear, consistent and long-term guaranteed signal to achieve a certain outcome (e.g. keep CO2 emissions below xx tons per year) and allow the free market to work. 

Michael Hogan's picture
Michael Hogan on Sep 14, 2013

And if the “xx tons per year” is where it must be – which is 90% below 1990 levels by 2050, implying a trajectory of no more than 50% below 1990 levels by 2030, and for the power sector no more than 50 g/kWh by 2030 – what does that do to your blithe acceptance of a continuing central – no, overwhelming – role for fossil fuels? There is no way to reconcile your vision of the future with the minimum level of effort required to reduce the risk of catastrophic climate disruption to a morally defensible level. You are an apologist for the fossil fuel industry and their most insidious propoganda, which is that it is really just much easier to continue on as we have done for 100 years, doing nothing more than tweaking it around the edges when and where it is convenient to do so. You are not proposing an alternative strategy, you are proposing surrender. That may work for you, but it doesn’t work for those of us who accept the moral obligations we have to future generations and are willing to explore strategies that will live up to those obligations.

Nathan Wilson's picture
Nathan Wilson on Sep 14, 2013

The notion that nuclear power is expensive is very short term thinking.  Yes the “levelized cost” from new plants is high (like solar and wind), but the incremental production cost is low.  Since nuclear plants have such extreme longevity (80+ years), the fleet average cost of electricity is very low.  

For  example, in the steady state, a nuclear fleet might have 25% of it’s plants making power for for $0.11/kWh, the newer ones (I’ll use the EIA number rather than yours), the older 75%, whose construction loans are paid-off will make power for $0.03/kWh (for an average of $0.05/kWh).

In contrast, a fleet of wind farms makes power for $0.089/kWh, but only lasts 20 years.  If batteries were used for power smoothing, the life might be 3 years for lead-acid, and hopefully 20 years with liquid metal or flow batteries (note that the power coming out of the batteries costs much more than the power going in, even assuming an optimistic 80% efficiency).  Wind farm maintainance cost goes up as plants age, by the way, so there is likely not much difference between the fleet average cost and the new levelized cost.

Hence nuclear is much cheaper on average.  The same is true of coal plants, hence the continued interest in cleaner coal technologies.

A few other comments: 

– the cost of nuclear is mostly local labor, so nuclear economics are very attractive in regions that import fossil fuel (improving trade balance and creating jobs), or would need to import renewable energy (all cities! and some regions).

– nuclear (with its front-loaded cost and long lifetime) is also particularly attractive in countries with shrinking populations and growing fraction of retired people (western Europe and Japan) and in fossil fuel exporting countries with declining export capability (due to declining production or increasing internal consumption).

– the historic rise in nuclear plant costs has mostly resulted from increased safety (post Three Mile Island), and declining construction volumes.  It is completely inconsistent to predict that renewables will drop in cost as a result of increasing volume, but nuclear will not.  Existing Gen II plants have a proven safety record which is much better than that of fossile fuel, and the weakest safety areas have been greatly improved in Gen III plants, hence no more cost increases need occur.

– in Re Futures, they used the 2010 AEO price for fossil fuels, which is before fracking pushed natural gas prices down to $2/MBTU.  In other words, in the US, renewables and nuclear both have levelized cost which are higher than fossil fuel in BAU (business as ususal).

Schalk Cloete's picture
Schalk Cloete on Sep 14, 2013

If you want to continue this conversation, please look at the top of the comments section where I will post a new comment. This thread has become too narrow. 

Schalk Cloete's picture
Schalk Cloete on Sep 14, 2013


The IEA 450 ppm scenario requires global CO2 emissions to be about 20% above 1990 levels by 2030, so it is not as extreme as you suggest. Accoding to the IEA, this will require a global CO2 price of around $40/ton by 2020, $90/ton by 2030 and $120/ton by 2035. This is the price that those concerned about climate change (myself included) will have to convince consumers to pay in order to get the job done. Under the current economic conditions, this appears to be highly unlikely even for rich nations which are in relatively good shape (see the recent developments in Australia for example).

We therefore have to be realistic here. Two decades of climate change talks could do very little other than look on as yearly CO2 emissions jumped by 50% with no signs of slowing down. The notion that the world will suddenly wake up and decide to pay lots of money to pro-actively mitigate climate change therefore appears to be highly optimistic, especially with the stalling of the global temperature rise in recent years. 

It is in the face of these unfortunate realities that I want to help mature cost-effective CO2 capture technologies which can be deployed quickly once climate change begins to have a larger and directly attributable effect on a large portion of the electorate (motivating them to pay the price required by rapid climate change mitigation). CCS is applicable not only to the power sector, but also to direct industrial applications. It has relatively low overnight capital costs (allowing for rapid deployment) and can access locked in emissions through retrofits (making it ideal for a delayed action climate change mitigation scenario).

Regarding the moral obligation, I would urge you to also consider the half of the global population that are at least 10 times poorer than you and I. Poverty is a terrible self-sustaining thing and can only be overcome by eradicating energy poverty. Poverty is also associated with very high birth rates which may very well pose an even larger sustainability challenge than climate change. I would therefore argue that we have a moral obligation both to the bilions of people currently living on $2/day or less and to the billions of people still to be born to encourage rapid urbanization in the developing world and, by extention, the well-established centralized energy systems necessary to make this possible. 

Michael Hogan's picture
Michael Hogan on Sep 14, 2013

Nathan, as always you see nuclear in only the best possible light and everything else in only the worst possible light, and your economic analysis is at the level one might expect for an engineer. It’s quaint.

The levelized cost of nuclear is a standard approach in utility economics based on the useful life of the asset and using conventional discount rates. The levelized cost of new nuclear is conservatively 12 cents/kWh and, based on actual recent bids by nuclear vendors and experience at Flamanville, Olkiluoto and the recent US sites, realistically closer to 15 cents/kWh. Those are typically based on useful lives of 40 years, but even assuming a useful life of 60 years it wouldn’t be much different given the industry standard approach to levelized cost calculation. And stretching the life of a nuclear plant to 60 years involves considerable incremental investment in critical components that is not included in those numbers. Put differently, all capital intensive technologies are cheap once the capital cost is paid off (you tout the marginal cost of nuclear at 3 cents…the marginal cost of solar is zero). But someone needs to pay off the capital cost. That’s why the only number that matters is the levelized cost. And the levelized cost of nuclear is not cheap.

The first two bullets are just odd. It is not at all clear why a hugely capital intensive investment in assets with very large unit sizes that amortize over 40 years or more is an attractive option in a society that expects (if I understand your premise correctly) that its demand for energy is likely to peak and then slowly decline over time. That argues for smaller unit investments that amortize relatively more quickly, so that the system can be re-sized periodically as needed without the need to deal with large amounts of stranded assets. I have no idea what you’re saying about “fossil fuel exporting countries with declining export capabilities” – that point is unintelligible.

Nuclear devotees love to claim that the steady rise in the cost of nuclear can be blamed on post-TMI safety regulations. Leaving aside that it was entirely appropriate to impose safety regulations post-TMI (and post-Chernobyl, and post-Fukushima, etc. etc.), the steady rise in nuclear costs begins prior to TMI, shows no particular discontinuity at 1979, nor at 1986. There are quite a number of reasons why nuclear has never really experienced sustainable learning benefits or scale economies; the data do not support the contention that it can be blamed to any significant extent on “unwarranted” permitting costs.

You need to step back and try to think a little more objectively. We’ll never overcome the barriers to nuclear power if we keep acting as if they don’t exist.

Nathan Wilson's picture
Nathan Wilson on Sep 14, 2013


Michael Hogan's picture
Michael Hogan on Sep 14, 2013

What this comes down to is: you start from the assumption that the path you favor is easy and unavoidable. But (and I’m giving you the benefit of the doubt here that you are sincere in saying you want to drastically constrain the ecological footprint of fossil-based energy production) the path you favor is far more costly and difficult than you seem to think and it is certainly avoidable. The teeming masses in poverty need accessible, affordable energy to lift themselves out of poverty. The average villager in Africa today pays about 600 times what we pay per toe, when they can get it. The world has been trying to extend centralized energy systems to such populations since before you were born (judging from your photograph) and yet the need has grown consistently faster than the rate of progress. Magically making a centralized energy system appear that would deliver 24-hour energy at developed world rates would be nice, but the poor of Africa and elsewhere will be long dead, as will their children, before that ever happens. Distributed, renewable energy sources will reach them much faster and can provide the energy they need to better their lives for a tiny fraction of what energy costs them today. That’s the answer to the moral dilemma you are using as an excuse to perpetuate the dominance of fossil fuels. And one look at Beijing on an average day will tell you all you need to know about rapid, fossil-energy-based developing world urbanization. China has already realized what a dead-end that is – you may want to pay closer attention to where they’re headed (hint: renewables and nuclear).

Nathan Wilson's picture
Nathan Wilson on Sep 15, 2013

I agree that the levelized cost of each new power plant is a good metric for local ratepayers and utilities to consider.  However, my argument is that the total cost of the energy system is the what matters most to society as a whole, and is therefore the most important metric for public policy.

Sorry for being unclear on the issue of declining fossil fuel exports, I had just read a Gail Tverberg piece on the subject (given impending peak oil, remember that the Earth will never run out of affordable uranium, there’s too much of it).

Regarding countries with shrinking populations, I was not considering reductions in demand, but rather reductions in the ratio of working people to retired people, which I believe is shrinking faster than electricity demand (since life spans are increasing too, hence future labor shortages).

Michael, the bottom line on nuclear cost is that they are low enough that anti-nuclear activists feel the need to vigorously campaign against nuclear power (e.g. your high prediction of nuclear cost, which greatly exceeds the US DOE EIA prediction).  No one bothers to campaign against oil-fired electric plants, they truely are going away on their own due to poor economics.

If my comments suggest that I believe only nuclear power power has a future, then I have created the wrong impression.  I live in the central US, the “Saudi Arabia of Wind”, in a town whose economy is powered by the oil and gas industry (I subscribe to my utility’s popular 100% wind offset program).  No one is less likely to go nuclear (before the oil runs out) than us.  The reason I speak out in favor of nuclear (and ammonia as a carbon-free transportation fuel) is those are areas where the truth is most lacking (CC&S also deserves more advocacy, but I’m less knowledgable about that).  There are lots of places with poor renewable resources and/or high population density wherein nuclear really is the best non-fossil option (the eastern US, Japan, Europe, etc); in my opinion, these places are extremely unlikely to reach renewable penetrations above 30% until the cheap fossil fuel is gone.

Schalk Cloete's picture
Schalk Cloete on Sep 14, 2013

China is a very good example here. Between 1981 and 2008, China reduced the number of people living on $1.25/day or less from 84% to 13.1% – mainly due to a large scale centralized energy buildout. The story is very different for Sub-Saharan Africa where complex political issues prevented such action resulting in a three decade stagnation in the percentage of people living below $1.25 (51.5% in 1981 and 47.5% in 2008). China was therefore in much worse shape than Africa three decades ago, but, thanks to lots and lots of centralized fossil fuels, pulled off a miracle. 

Because China now emits 26.7% of global CO2, it is a global manufacturing powerhouse, capable of investing in clean energy. For example, Bloomberg New Energy finance recently published a study on China’s move towards a clean energy future. One can expect China’s economy to mature away from its total present reliance on coal more towards gas and nuclear. This is indeed projected with coal’s share in the electricity generation mix (adjusted for capacity factor) falling from 77% in 2012 to 57% in 2030 for the “traditional territory” scenario. However, even in the most optimistic “RE barrier busting plus emissions trading scheme” scenario, coal still maintains a 52% share of generation in 2030 with solar and wind rising from 2% today to 15% in 2030 (roughly where Germany is now) with hydro falling from 15% to 12%. By that time, the world will probably just be passing 450 ppm…

It is also important to note that only about half of Chinese coal consumption is in the power sector. The rest (a full quarter of global coal consumption) is used in a wide range of direct industrial applications where renewable energy is not yet even being considered. 

I therefore still maintain that a centralized energy buildout is the most rapid way in which to eradicate poverty, stabalize population and get a nation to the point where it is rich enough to invest in pollution reduction mechanisms. It is also clear that renewable energy is highly unlikely to have a substantial impact on global CO2 emissions within the timeframes recommended by climate science. 

Michael Hogan's picture
Michael Hogan on Sep 15, 2013

Your prescription remains, at rock bottom: Ignore the threat of catastrophic climate disruption and all of its consequences, which will be particularly dire for those in the developing world, and if you want to feel better about giving in to your addiction to fossil fuels just think about what it’s going to do for those in the developing world. You don’t actually care about the threat of climate disruption, or if you do you are tragically misinformed about the consequences of what you’re recommending. Your comment about the IEA’s 450 ppm scenario is telling – you seem to think it’s based on global emissions being 20% above 1990 levels in 2030. In fact, it’s based on emissions from OECD countries (which constitute approximately 70% of global emissions) being 40% below 2005 levels in 2030, and the RoW being no more than 15-20% above 2005 levels in 2030. That works out to a global level of about 25% below 2005 levels in 2030. I was also wrong – I said 50% below 1990 levels in 2030 – but I was a lot closer to being right than you are. And that assumes that the IEA’s ambitions are adequate – I happen to feel they are not. So your vision of the future is one that drives us willy nilly over the climate cliff. There is virtually no way your prescription gets us anywhere near even the IEA’s 450 ppm scenario. Which you seem to feel is ok because you think addresing the problem is just too hard.

Alistair Newbould's picture
Alistair Newbould on Sep 15, 2013

Willem, can’t argue with your aim, just how we are to get there. The one child policy of China has slowed population growth there, but population is still growing due to reduced death rate. So if slowing reproduction doesn’t work that leaves only increasing death rate. Anyone want to go there even in theory? I think Gaia may take us there but I am not looking forard to the journey.

Schalk Cloete's picture
Schalk Cloete on Sep 15, 2013

I’m a bit confused about your mixing of benchmarks between 1990 and 2005. 20% above 1990 levels is roughly equivalent to 10% below 2005 levels, so I don’t really see the problem. If your organization has access, you can check this yourself in the IEA WEO 2012 hereAlso, in 2012, OECD countries emitted only 40.3% of global CO2 emissions in 2012 (BP Statistical Review). 

Anyway, back to the conversation… I held similar beliefs as you some time ago after I read a number of climate change books from authors such as Mark Lynas, George Monbiot and Fred Pierce. However, as I learned more about the economic and societal aspects of our global sustainability crisis, I realized that an all-or-nothing climate change approach is not feasible. 

The fundamental drivers of human action are short term in nature (towards instant pleasure and away from instant pain). We know that smoking is one of the biggest global killers, yet tobacco remains a massive global industry (roughly triple the size of the clean energy market). We know healthy diet and exercise is essential for along, healthy and happy life, yet global obesity rates continue to soar. We know we should study early for our exams, yet we often end up in desperate late-night cramming sessions. Countless global experts warned about the 2008 credit bubble, yet nothing meaningful was done until it burst.

Similarly, we know climate change is a major concern, but it is highly unlikely that we do anything major about it before it starts having real negative and directly attributable effects on a large part of the electorate. Pro-active climate change mitigation is unattractive to developed nations because of their highly sensitive economic positions and to developing nations because of their commitment to rapid economic growth. 

As I see it, one can either deny these inconvenient realities, demand drastic climage change action (only leading to further political stalemate and frustration) and cheer every 50 MW solar farm being built (even though China alone builds one coal plant which is equivalent to 100 such solar farms almost every week), or one can accept this objective reality and prepare for a reactive climate change mitigation scenario in coming decades. 

Don’t get me wrong, I would be delighted if the world can in some way change its fundamental nature and start serious climate change mitigation before the real negative effects of climate change start. However, given developments over the past two decades and the position of the global economy today, I just think that this is highly unlikely and am therefore directing my efforts towards making the best out of this imperfect scenario. 

Michael Hogan's picture
Michael Hogan on Sep 15, 2013

You say you don’t know see the problem…. The problem is two-fold: Arithmetic and horizon. The arithmetic problem is that your fossil-centric prescription is highly unlikely to get us to where we need to be in 2030. The horizon problem is that the need for progress doesn’t stop in 2030 – to avert catastrophic ecological collapse we need to continue to reduce greenhouse gas emission steeply beyond 2030, and your fossil-centric prescription makes that nearly impossible, because the development of fully commercial, affordable alternatives to fossil-based energy needed for that post-2030 progress will not have taken place pre-2030. So let’s come to an accommodation: You can carry on shilling for the fossil fuel industry, disseminating its seductive narrative of a 20th century, oil-coal-and-gas-based Western lifestyle for all, accompanied by the smug assurances that no one’s going to do anything about it anyway. I’ll carry on trying to avert the ecological catastrophe that will inevitably follow if your crack-dealing blandishments carry the day. Deal?

Bob Meinetz's picture
Bob Meinetz on Sep 15, 2013

Michael, your view from an accounting perspective is certainly valuable. But to dismiss Nathan’s engineering viewpoint as “quaint” is arrogant – it’s one that is sorely missing from today’s energy debate, which is dominated by bottom-line thinking and ignorance of what’s technologically achievable.

There is no standard which is more contentious than levelized cost in energy – anyone can create a set of parameters which argue for their preferred flavor of generation. Nonetheless, the U.S. Energy Information Administration has perhaps the most objective appraisal and they calculate 2018 nuclear ($108.4/MWh) as being competitive with coal ($100.1), one-third cheaper than PV solar ($144.3), and 41% of solar thermal ($241.8). For renewables only onshore wind and hydro are cheaper; the first is not dispatchable and not carbon-free; the second is limited by region and not scaleable. You can call this putting nuclear in the best possible light, but it’s using the very parameter – cost – that is the basis for your assessment. And assessing solar’s marginal cost at zero ignores the costs of gas peaking plants to provide backup, for those relatively frequent occasions when sunlight isn’t available.

Nuclear devotees (a group in which I’m proud to include myself) do love to point out that the cost of nuclear can be blamed on “post-TMI safety regulations”, because it’s largely true. The U.S. has the most expensive nuclear industry in the world, and the relationship of its onerous regulatory process to safety is debateable. One only need look to France – at 4.6c/kWh the cost of nuclear there is one-third of your estimate for the U.S. France has never had a serious nuclear accident or radiological casualty, though nuclear provides 75% of the country’s energy. Areva’s EPR has had problems in Finland, but it’s a standardized design and new builds are going up faster and cheaper. And small modular reactors show promise of effectively dealing with the scalability issue.

Including TMI, including Chernobyl & Fukushima – nuclear is the safest form of baseload energy generation, and its significant barriers are ones of public perception.

Michael Hogan's picture
Michael Hogan on Sep 15, 2013

Sorry Bob, but while Nathan’s engineering insights are indeed valuable (I, by the way, am an engineer at least by education, among other qualifications) his economic analysis is not quite up to the same standards. And while the EIA’s view on 2018 levelized costs is a little optimistic based on all of the available historical evidence, it is still a far cry from the cheap alternative Nathan seems to think nuclear is. I will stand on the available evidence – that the levelized cost of nuclear, measured on an apples-to-apples basis with the other alternatives, is between 12 and 15 cents/kWh; most of the industry analysis I’ve seen supports that. If it comes down with experience, so be it, but that’s never happened before and it’s optimistic to believe it will do so now. And you’re absolutely right – levelized cost can be a highly misleading metric when considering overall system costs and the final delivered cost of electricity to the consumer. And you’re right that intermittent renewables bring other costs related to system integration. But you conveniently forget that the same has been true of nuclear. Because of its inflexibility and its very large unit sizes nuclear generation required massive investments in pumped storage hydro, transmission and (yes) additional “back-up” capacity, in order to integrate it into the existing power system. France today has an extensive system of electric resistance thermal energy storage facilities scattered around the country and paid for much of the Swiss hydroelectric system (in addition to large pumped storage hydro facilities in France) as the price to be paid for their current heavy reliance on nuclear. Although nuclear constitutes a smaller share of the US power mix, where it is prominent similar large investment was required and continues to be necessary. Nothing wrong with that, but it is misleading at best and hypocritical at worst to use a different standard to judge intermittent renewables. If we want to commit ourselves to a feasible low-carbon energy system we can make the same judgment we made 50 years ago to press ahead with what’s required, reaping the benefits down the road as we are today with fully-depreciated nuclear and the fully-depreciated infrastructure that was needed to integrate it. Finally, your information on France and the EPR is erroneous. Areva is having the same problems with delay and cost overruns at Flamanville and in China that they have had at Olkiluoto. The 4.6 cents per kWh is (again) a misleading number because it reflects a large fleet of largely depreciated plants; it also reflects massive subsidization and cost-transfer by the French government as a publicly acknowledged feature of their national industrial strategy. Again, nothing wrong with that, but let’s be sure we know what we’re talking about here. The cost of new nuclear in France is proving to be virtually identical to what it is here – and Areva/EdF are proving that to be the case in the UK as well where they are insisting on a 40-year contract with the government at the equivalent of about 14 US cents/kWh (with escalation!) to build a new EPR plant at Hinkley. There is no data-based support for your contention that unwarranted regulation is the cause of nuclear’s cost problems, as EdF’s experiences throughout Europe make clear. As I said before, if we want to make nuclear a key part of the low-carbon future we need to deal with the issues as they are rather than acting as if they don’t exist.

Nathan Wilson's picture
Nathan Wilson on Sep 15, 2013

Michael, your belief that only a 100% renewable energy system is viable is nearly as much of a deviations from mainstream science as is climate change denial.

We have four tools for CO2 emission reductions: efficiency & conservation, renewables, nuclear power, and fossil fuel with CC&S.

If you read material from a source that isn’t aligned with a single solution (eg.  IEA on Clean Energy and  IEA on CC&S), you’ll see that they are saying we can reduce CO2 emissions for lower cost using all four solutions, rather than just picking one or two.

Consider electric grids with high renewable penetration.  I’ve never seen the tradeoff made in any study, but it is apparent from the EIA energy costing and capacity factor data that they would be much more cost effective if they stopped at 30-60% penetration, and got the rest from fossil fuel with CC&S.  Similarly, high nuclear scenarios are more cost effective if they stop at 50-80% penetration, and get the rest from a mix of hydro, desert solar, and  fossil fuel with CC&S.

For very high temperature process heat applications (e.g. steel, glass, and concrete making), fossil fuel with CC&S is by far the cheapest solution.  For temperatures below 900C, advanced nuclear may compete effectively with fossil fuel w/CC&S.

For automobile, truck, train, and ship fuel, ammonia from fossil fuel with CC&S is likely the cheapest non-CO2-emitting solution.  But in some locations with expensive imported fossil fuel and low cost local labor, nuclear and renewable ammonia may be preferred. (Converting food into biofuel is a non-preferred solution due to its high ecological footprint among other reasons.  Future breakthroughs in battery cost may provide an additional alternative.)

Regarding people currently living in energy poverty, certainly they will be more comfortable in their poverty if they each have a small solar panel to charge a reading light and cellphone.  But they will still be in poverty.

So I don’t accept your claim that including fossil fuel with CC&S (and presumably nuclear) will prevent development of renewables, rather they enable it, by making the total cost of low CO2 emitting energy more acceptable to society, and by preventing a situation where some parties at the climate negotiating table have no solutions that favor them (e.g. no town or region whose economy is dependent on fossil fuel will agree to a non-fossil future, and Greenland will never make solar power for the same cost as Egypt).

Michael Hogan's picture
Michael Hogan on Sep 15, 2013

Nathan, I have never once in this discussion advocated 100% renewables. I have simply pointed out to our fossil-fuel-loving friend that a system that continues to be dominated by fossil fuels (which is pretty clearly what he’s advocating) cannot be reconciled with the prevailing scientific consensus on anthropogenic climate disruption, no matter how many times he protests that he is concerned about it. It is he who says renewables cannot become a significant share of the energy system – I maintain that they can and must do so in order to meet minimum safe greenhouse emission levels (leaving aside other reasons why it is important). I have never said fossil fuels with CCS cannot or should not be a part of the solution, nor have I ever said nuclear cannot or should not be part of the solution. I have said – and the available evidence supports me on this – that neither of those options is as easy, affordable or feasible as their respective proponents would have others believe, particularly when considered objectively against the objections they raise to the role of renewables. There is no risk-managed, affordable, reliable solution for the energy system in the next 30-40 years that also delivers the needed emission reductions that does not include a large contribution from renewable energy (as well as efficiency, and lots of it). Pairing renewables with clean fossil, some nuclear, demand response and a lot of efficiency is an eminently feasible and affordable solution and one we can execute on in the needed timeframe. He is peddling snake oil when he suggests otherwise – in fact he is advocating a path that cannot deliver the needed emission reductions.

As for addressing poverty, being able to charge a reading light and a cell phone at a reasonable cost is how you start. Waiting alone in the dark for the grid to be extended to their village sometime in the next 75 years is not really much of a solution.

Nathan Wilson's picture
Nathan Wilson on Sep 16, 2013

Ok, I’m sorry for mis-stating your position on 100% renewable and nuclear.

But I think you might be mis-stating Schalk’s position too.  There is a big difference between “advocating a path” and advocating a technology that works with the path we are on.

He seems to be saying that fossil fuels today are cheaper than non-hydro renewables; this is consistent with EIA data for the US.  Are you disputing this, or rather are you talking about costs in the developing world, or about predicted future costs?  Are you arguing that people in developing countries won’t mind paying more for cleaner energy? Or are you putting costs aside, and talking about energy mixes that would be politically acceptable?

It sounds like you’re really disputing his conclusions without addressing the arguments he uses to get there.  I don’t  like the idea of a fossil fuel dominated future either, but the numbers as I understand them say that renewables and storage must come down in cost significantly in order to beat out fossil fuel as the dominant energy source, at least when short-term economics is the primary consideration.

Michael Hogan's picture
Michael Hogan on Sep 16, 2013

He’s selling the idea that we should be satisfied with what can be done to make fossil fuel technology a little less toxic. Carbon capture and storage is a fine idea; it’s many years away from commercial demonstration at a scale that even approaches the level of penetration by wind and solar, the feasiblity of sequestration at the required scale is highly doubtful (as your hero Vaclav Smil has convincingly argued), and the cost once all of those problems are solved may still be prohibitive. In other words, a GHG abatement strategy based solely on capturing and sequestering the emissions from fossil fuel combustion is even less realistic that one based on 100% renewables. Those in the fossil fuel industry who peddle this nonsense are well aware of the snake oil they’re selling. I don’t know where Mr. Schalk falls on that continuum of hypocrisy, but whatever his motivations the result is the same. Nuclear is expensive, clean coal and clean gas is expensive, renewables are more expensive than unabated fossil fuel technologies (but not as expensive and difficult to integrate as you and Schalk seem to think), and carrying on as we have is the most expensive option of all. He is presenting a false choice – there is no low-cost option available. To believe that there is is a pathetic delusion, and to attempt to induce others to believe that there is is monstrously irresponsible.

Schalk Cloete's picture
Schalk Cloete on Sep 16, 2013

There is a big difference between advocating a continued dominant role for fossil fuels and stating that it is the most likely scenario. What I am advocating is a technology-neutral climate change mitigation strategy aimed at abating CO2 in the most cost effective and practical way. To illustrate I’ll copy in a previous comment about the current CO2 abatement impacts of CCS and solar PV and the price we are paying to deploy these technologies:

Current industrial projects are storing about 23 million tons of CO2 per year (source). For perspective, consider that solar PV generated 93 TWh of electricity in 2012 (0.42% of the global electricity supply). If this 93 TWh displaced load-following natural gas at 0.4 tons of CO2 per MWh, the CO2 saving can be calculated as 37.2 million tons of CO2 per year which is in the same ballpark as current CO2 cuts from CCS. Of course it must also be considered that intermittent renewables increase the carbon intensity of thermal plants, thereby reducing their actual CO2 abatement advantages and that the PV push has helped drive Germany from gas to coal, thereby increasing the country’s emissions.

However, the global financial support for solar PV absolutely dwarfs support for CCS. The above-linked source states that global governments currently have $20.7 billion available for longer-term CCS deployment. For comparison, Germany alone (32.6% of global PV capacity) has already committed more than €100 billion to solar subsidies. This is a typical result of technology forcing – the same result is achieved at a ten times higher pricetag. 

Joris van Dorp's picture
Joris van Dorp on Sep 16, 2013

Several very interesting discussions are running on this very interesting article.

Concerning the question of whether nuclear power can play a larger part in solving the climate disruption issue, there is a point I’d like to make.

First, on the issue of the cost of nuclear power, some of the people who are dismissing nuclear because it is said to be too expensive seem to be unaware of how the cost of nuclear power plants is built up. When looking at some of the current nuclear new build in developed nations, the cost fraction of the nuclear part of the facility has fallen to less than 5%. In other words. 95% of the cost of these new builds is:

– multiple independent emergency cooling facilities (3 or 4 separate facilities, depending on the specific plant design).

– the cost of interest

– the cost of unanticipated regulations changes

– the cost of the risk of political shut-down and delay

What this means is that there are huge untapped opportunties to lower nuclear power costs. The cost of the nuclear part should not need to cost more than 30% to 50% of the total plant cost. Therefore, the future cost of nuclear power could be reduced by 85% to 90% as compared to the costs of projects such as Flamanville and Olkiluoto.

Environmentalist need to help make sure that these cost reduction potentials are reached. That is because they are not difficult to achieve from a technical point of view. Allowing for improved regulatory efficiency and reform of regulatory processes to fully reward enhanced safety features of modern NPP’s, and for reduced political opposition to nuclear power through education of the public, nuclear power will demonstrate it’s superior economic performance going forward.

Environmentalists need to accept that fact that solving the climate disruption issue will require that a power source is made available to the worlds’populations that is cheaper than fossil fuels. Only nuclear power has this potential – in spades – without the need for any particular technological breakthroughs such as the kind required to make intermittent renewables and electricity storage cheaper than fossils.

Marcus Pun's picture
Marcus Pun on Sep 21, 2013

No nuclear plant in the US has operated for more than around 44 years.  Older reactors have a host of issues too numerous to mention here. Suffice to say that extending the life of reactors has been problematic and expensive. San Onofre is a clear example with more than 650 million spent then another 500 million and then now they are trying to stiff the ratepayers with most of the decommissioning bill. The Monticello plant has costs for its retrofit hitting at least 655 million.  France is going to probably spend 13 billion on safety upgrades alone in the wake of what happened in Japan. That will increase the cost by about 8%. Does not include the inevitable system repairs and refits.


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