The energy transition delusion
Manhattan Institute senior fellow Mark P. Mills discusses the hidden dangers behind the current scale and pace at which countries are transitioning to renewable energy sources and some common delusions held by its advocates. Interview by Nick Cater.
This interview was originally recorded on Battleground on ADH TV. Watch the recording or listen to the podcast.
Nick Cater: As I wrote recently in the Australian, you don't have to be a climate sceptic to conclude that the Australian Government's energy policy is bonkers. You only have to listen to the Energy Minister’s own words. Chris Bowen is intent on transitioning our energy system from one powered by hydrocarbons to one powered by wind turbines, solar panels and batteries.
He reckons that 82% of Australia's energy can be generated by these so-called ‘renewables’. The government's target of a 43% reduction in carbon emissions compared to 2005 was locked into legislation last month. Like it or loathe it, the government is legally obliged to reduce greenhouse gas emissions by 116 megatons over the next eight years, and another 350 megatons in the 20 years after that, in order to reduce emissions to zero by 2050. The government could look to a new technology to accomplish its goal—small modular reactors, for example. Zero-emissions, totally reliable suppliers of dispatchable synchronised electricity 24 hours a day.
Chart showing the projected path to net-zero emissions by 2050, including the required reductions from 2005 levels.
But this government is going a different route. It plans to install 40 7-megawatt wind turbines every month. That's more than one a day from now until 2030, each one as tall as the Sydney Harbor Bridge. It plans to install more than 22,000 500-watt solar panels every day for the next eight years—2.4 for every man, woman and child in total. And all this supposes that we can buy the panels in the first place. Polysilicon wafers are in short supply, and 95% of them come from China. And to get the power from these energy farms to our homes, the government plans to double the size of the grid.
All this, the government claims, will bring down the price of energy. But will it? To answer that question, I recorded a conversation with Mark P. Mills, a policy analyst at the Manhattan Institute who has seen similar energy transition proposals unfold in Europe and America. Mills is the author of a recent paper, The Energy Transition Delusion: A Reality Reset, which takes a hard look at some of the assumptions that justify our current policy.
Mark P. Mills joined me from New York for this conversation, first broadcast on Battleground on ADH TV.
Nick Cater: If I can share with you a little local political background, our government here campaigned at the last election with a promise to cut $275 off the average household electric bill.
And it's going to do this, apparently, by transitioning from coal generation to renewables. Do you know of any jurisdiction in the world where a switch from hydrocarbons to energy generated from renewables has made energy bills cheaper?
Mark P. Mills: No. In fact, we could state the inverse. Every place, every state in the United States, every country in Europe, where the share of electricity from wind and solar has increased, has led to higher-cost electricity for consumers and higher-cost energy in general. And unfortunately generally ignored is lower reliability and critically, which is what Europe's discovering now; lower resilience. And resilience is different than reliability. It's their ability to surge energy for unexpected reasons—in this case, a loss of supply in Europe from Russia.
But you can lose supply from other causes. In fact, most people have forgotten, or didn't know, that last fall there was a massive wind lull across the North Sea. These things happen all over the world. They're called wind droughts. So massive areas, a continent’s size, where you have no wind for days or a week or 10 days. This happens predictably in the sense it always happens, but it happens unpredictably in the sense we don't know exactly when it happens. But when that does happen, you have no wind—therefore no energy from wind turbines for days, maybe a week. You have to do something else to keep the lights on, so you surge the production of electricity from usually natural gas plants, which causes crazy increases in gas prices, in electricity prices. That's what happened last fall in Europe—a thousand percent increase in weekly bills, which of course has a huge impact on the annual bills.
The wind did come back after 10 days and the effect of that drifted into history, but it'll happen frequently, and the more wind and solar dependence a grid has, the greater the impact, of course, on the grid and on consumers.
Nick Cater: So let me ask the question I think you just answered, but I'm going to ask you in a very direct way. Do you know of any energy system in the world that runs with 82% of power generated by wind, solar, and batteries?
Mark P. Mills: No. The closest we can get is Germany, which has a pretty high percentage. I think they achieved last year something approaching 60% of the delivered energy in the grid from wind and solar, which is quite remarkable. But the country overall is still 70% dependent on hydrocarbons. So it's important for people to separate these two markets, right? Obviously, keeping the lights on, computers running, homes powered with everything that we have in our appliances requires electricity, but the entire industrial sector runs on natural gas, coal, and even oil.
And so that doesn't switch to electricity. So the idea that we get the majority of energy from wind and solar is chimerical. It hasn't happened. It's not impossible, let's just be clear. There's a funny thing in engineering and physics. Some things are impossible. Some things are just stupid. It's impossible to fly to the moon with an airplane because there's no air, so that’s not stupid, you can't do it. You could fly a helicopter from Australia to the United States. It's very difficult, pretty stupid, very expensive, but you could do it. A lot of refuelling, very inconvenient.
So imagining all grids, wanting in wind, solar, and batteries, it's actually not impossible. It's a really dumb idea. Because it requires such massive expenses, massive overbuilding. It's a crushing impact on the economy. The scale of resources required is off the charts huge, but it's physical resources, and the cost of it is stunning, and in fact it’s so great that in the short periods that people are talking about, which is in the next five to ten years, these massive increases in wind and solar battery construction, I think it's pretty reasonable to say that it’s close to impossible to build that fast.
So, the impossibility. Eventually, a century from now? Okay. I don't have a problem with a lot of things happening in a century, but in the next decade or two, getting to 80% wind and solar on grids in Australia, Canada, and Europe, United States? It's not going to happen. In fact, the whole separate issue is not just money. We're talking about increasing costs of energy and electricity for consumers, not by a little bit, like 50% a year, but by hundreds of percent. The United States enjoys average electric costs one third of that in Europe. One third. This is a stunning advantage for its consumers and its industries.
And what's happening is that the countries in Europe are starting to deindustrialise, and their businesses are moving to places like the United States or to Asian countries, or to South America, or even Africa, because you simply can't function and compete at the prices that are imposed on markets by this really unfortunate goal of rapidly eliminating hydrocarbons. It just can't be done in any sensible way, and can't be done in the way people imagine, which is to say that building the quantity of wind turbines and solar arrays and batteries, just as one example, requires a quantity of copper. Just copper, nevermind the exotic metals we've heard, rare earths, which, by the way are not rare. They have rare properties. They're not rare. We just choose not to mine them. We’re too shy to mine them.
But the more interesting question is, basic metals like copper and aluminium and nickel are utterly critical to building the machines that are called renewable energy machines. And what's generally lost in this discussion, what seems to be totally absent from political recognition, is that the quantity of these minerals you need to deliver the same unit of energy is between 300 to 3000% greater than using conventional hydrocarbon machines. The quantity of metals are so great that we know for a fact–and this is not speculation–that the world is not now mining enough metals, nor planning to mine enough metals. There are no plans announced or contemplated on planet Earth to produce enough copper to build a quantity of batteries and wind turbines and solar arrays that are imagined by all the so-called transitionists.
Record quantities of metals such as copper will be required for a transition to net zero through renewables.
Nick Cater: Well, let's push this one step further: lithium. You talk about lithium in your article, lithium being essential for batteries, and it's also used, I gather, for other things in the process. Now the whole world is chasing lithium, because every decent country in the world set its 2030 target, and they're all rushing to get there. They're all going down this, or most of them are going down this similar route.
It just is not available. And we were promised, of course, that the price of electric vehicles, for instance, would come down because the batteries would be mass-produced. But instead, they're going up. The cost of a Tesla battery to run your home. I think it's called a power bank, when they were first introduced into this country in 2017, it was about $9,000 to put one in your home. Now it's $19,000. So we are just at this point where, unless we can increase the supply of lithium, which seems difficult to do, and increase it vastly, then the price of it's going to go up and the whole economics falls to pieces.
Mark P. Mills: Well, it already is falling to pieces, and the world's demand for lithium has already caused more than a thousand-percent increase in lithium prices in the last eight or nine years, which is one of the big factors, as well as copper prices have gone up, and so have aluminium prices, which are also in the batteries, manganese, zinc, and other metals that are in batteries.
This is the fact that it's important to have in mind that this is just an interesting consequence of becoming very good at manufacturing batteries. The scale of battery manufacturing is already enormous. We don't have to talk about scaling up. It has scaled up. The world produces an astonishing quantity of lithium batteries already. That's why we've had this increased cost, because we're demanding a lot more minerals. As it stands now, the manufacturing processes have become so good, automation and the learning curve over the last decade, that to make a battery, the costs are dominated by the materials, that is, 60 to 80% of the cost of making a lithium battery is just in buying the metals and materials.
So what that means, put differently, is that the future cost of batteries is not tied up with new factories or new imaginations, it's tied up with what the mining companies do around the world. And Australia's a big mining country. In fact, it's the number one producer of lithium. The problem, as doubtless you know, and many people know in Australia, is that most of the refining of the lithium into a form that's useful to make batteries occurs in China. China is not just the OPEC of polysilicon to make solar modules. It's the OPEC of refining energy minerals into a form useful to make the metals, neodymium, for the motors and generators and wind turbines, and also for battery chemicals. So, I'm not in a camp that thinks that the metals don't exist in the world. I've always argued against peak oil, peak metal, peak uranium. Yeah.
Uh, the Malthusians are impossible to tamp down. It's like Whac-A-Mole, or Whac-A-Malthusian. They just pop up constantly: ‘we're going to run out of stuff.’ The world has plenty of stuff. The problem is how long it takes to open mines and get to the stuff. It's not a physical shortage as much as a resource matter. It's a practical reality. As the International Energy Agency pointed out, the average time to open a new mine globally is 16 years. I think it's a little faster in Australia, maybe a decade or so. In the United States it's probably infinite at the moment. In Canada it’s 10 or 12 years, but around the world, the average is 16 years.
So we are planning to build things that require the mines of the world to expand by 600 to 6000% in the next decade or two. But nobody is planning yet to start trying to open the mines or financing them. You search for words to express this disconnect between these aspirations and what's actually happening in the industrial world. It's almost infantile. To decide we're going to do this and to pretend that the resources will just magically appear because of the demand. Look, they eventually appear, maybe in 50 years, but in the meantime, that kind of demand will cause inflation in those minerals. And if you inflate the cost of copper, you inflate the cost of everything that's made from copper, which is all the traditional appliances and electrical machinery we need in society.
Nick Cater: ‘To come to the nub of it’, you write in the paper,
an energy transition away from society's dependence on hydrocarbons is not feasible in any meaningful way, in any meaningful timeframe. It is a dangerous delusion to base policies on the idea that such a transition is possible.
Yet that's where we are in this country. We have a government that is basing its policy on that, and that leaves some of us just lost for words sometimes as to what this means. Why can they make such decisions, which are just ignoring basically the laws of physics?
Mark P. Mills: They're also ignoring basic laws of behaviour and engineering. Some things can't be done in the laws of physics. Some things you just can't accelerate. It's very hard to open a new mine. It takes time. It's like a high inertia. They're big things. They cost billions of dollars. You can interview a mining executive and ask them, how long would it take for you to double or triple your mining capacity, and what are the impediments?
Well, there's lots of regulatory impediments to that. It takes years, decades sometimes. Why we're having this happen is–this is a question that goes beyond physics and economics. It goes into the psychology of narratives and markets. You can set aside the motivation. We all know what the motivation is. It's the belief that we have to do this for climate change. All right. You don't have to debate the belief of why it has to happen. You have to wonder why they are so infatuated with the idea that this transition, quote unquote, could happen at a price society can afford, at the velocity that they think, and worse, that they're believing that it's actually zero emissions.
What’s lost here is the fact that all the metals and materials that we have to mine to build these machines, they take–again, on average, you're talking about across the board, a thousand percent increase in metals and minerals per unit of delivered energy, per unit of heat to heat a house, per unit of mile to drive a vehicle.
When you switch to wind and solar and batteries for cars, you increase the call on metals by a thousand per cent per mile delivered, per unit of heat or light delivered to a residence. That's a massive increase in metals mining for the world. Something that hasn't happened in all of history over that short a timeframe.
It's not, in fact, possible to imagine that happening.
Nick Cater: Well, let’s come to transport, because we put all the emphasis on energy in most countries. I think they do that, because it's possibly politically the easiest one to bite off. You know, you don't want to stop people driving cars, and agriculture is hard as well. So we focus on the energy sector, but carbon emissions that come from transport are considerable. Now the plan here is to move over to electric vehicles, but it turns out that that's not quite so helpful in reducing emissions as we might think.
Graph showing the ‘carbon debt’ of electric vehicles compared with their diesel counterparts
You, you published this graph in your paper, which I should point out is based on data from Volkswagen, so it's a reliable source, you'd think, that shows that electric cars come with a carbon debt equal to emitting between eight and twenty tons of Co2. So that debt has to be paid off, as it were. So in effect, an electric car has to be driven, I think looking at this graph, for more than 60,000 miles–that's roughly a hundred thousand kilometres–before you save more carbon than you would if you just picked up a diesel Hilux out of the showroom and drove that off. Right?
Why don't people talk about these facts, debate them, consider whether it is actually so sensible to move to electric vehicles on that basis, or should we stay with more efficient forms of petrol and diesel? But we don't have that discussion, do we?
Mark P. Mills: No, in fact, it's a revelation to most people. There's a reflexive belief that if the tailpipe doesn't exist, the vehicle has zero emissions. You know, when you're driving an electric car, while you're driving it, it obviously emits nothing. This is hardly a brilliant insight.
And as everybody knows charging the vehicle causes emissions, and there's been some discussion about that, but there's been insufficient attention to that in this sense–it matters a lot when you charge a car what kind of emissions you're causing, because depending where you are in the country, in your country, in any country, and what time of day you charge it, the actual emissions associated with charging are highly variable. It might be very little. It could be happy to charge it when solar arrays are available–surplus power. You might be charging it when it's using natural gas or coal. Depends where you are in the world. In China, it would be almost all coal, because it's a two-thirds coal-fired grid.
But it turns out that's the least of it. And God bless Volkswagen, and Volvo did the same thing, by the way–you could find it on their website–they didn't make much of a hullabaloo of putting the study up on their website, but I do think after they got spanked with multi-billion penalties for Dieselgate. Volkswagen is a little sensitive about policy makers understanding the reality that zero-emissions vehicles aren't zero-emissions.
You're simply moving the emissions elsewhere, to a different part of the operations of the vehicle–in this case, before you actually drive the vehicle. All the big mining machinery, which is all oil fired, that digs up all the rocks to make the battery, all of the different machinery that grinds the rocks, all the different chemicals and chemical processes that turn the ore into refined minerals to make the batteries.
That entire process is very energy intensive and leads to, in Volkswagen's case they calculate, and, they illustrate, about 12 tons of Co2 emitted before you drive your first mile with your electric vehicle. And as you point out, after about 60,000 miles or a hundred thousand kilometres of driving, you then manage to begin to save net Co2. That Co2 is not emitted in Australia if you're driving it there, it was emitted mostly in China. If the mining was in Australia, if the refining was in China, if the mining of the cobalt was in the Congo, it's that share of Co2.
But people will look at it and, ‘say we'll make it better.’ Well, sure. I mean, lots of things get better, but we also know, as the International Energy Agency itself has pointed out in its own unpublicized papers–they release them without any fanfare–that the emissions from making batteries are going up, not down.
Because as we mine each new ton of copper, each new ton of manganese, the ore grades–that is, the percentage of minerals in the rock–has been declining, and has been for hundreds of years. Which means you dig out more rock, use more energy and emit more Co2. So in fact, it's entirely possible that not only do you not save that much Co2–you do cut emissions, it's not zero, you might cut it 20 or 30%, you might even cut it in half, depending on where the materials come from and where you drive the vehicle. But it's also quite probable that, five or 10 years from now, the net effect of using an electric vehicle will be to increase global Co2 emissions, just not in Australia.
Why are we having that debate? When I publish stuff like this–and I'm not alone in publishing it, I use other people's data–it sort of stays in the political sphere. What's happened is that we have this really embarrassing, and you know this, it's true in your country. It's true in my homeland, it's true in the United States, my adopted country, we have this bifurcation of energy discussions as political.
So you're a leftie if you like windmills, and you're a rightie if you like hydrocarbons. Energy isn't political, except in the sense of the political consequences of not having enough of it, cheap enough. The actual physics of energy is not political. We ought to be able to have this discussion. And if we, if you, and if we say,‘look, we're happy the public accepts more expensive energy, more inconvenient cars, and higher CO2 emissions elsewhere, and we don't really care about the pollution caused by mining in Africa or the child labor there, we, as long as we know about it and say affirmatively, I don't care. Okay. I could disagree with you morally, but at least you know you're making that decision. I don't think people even know they're making those decisions.
Nick Cater: I'm gonna put that graph up once again, because if we can get that up from the production room, because people need to see this. They need to take this in, the effect. That, commonly, people here will buy a car and they'll trade it in after three years for something else. So in those three years, they're unlikely to have done a hundred thousand kilometres, especially in an electric vehicle that needs charging up so frequently, I would think. But anyway, then, you would have that car, it would sit in your driveway, you'd feel full of virtue and you'll be doing absolutely nothing. You'd be better off driving a Hilux. It's extraordinary.
Mark P. Mills: And you've already admitted 12 to 15 tons of Co2 before. When you take ownership of it, you own it, you own that Co2, so you better drive that puppy for a couple hundred thousand kilometres to pay back your debt, and if the battery breaks down, well, you know, that’s just okay.
Take-up of electric vehicles may not lead to the desired emissions reductions.
Nick Cater: I want to come to you for one more question and a redemptive ending, I hope. But, first of all, if anybody wants to, to check that graph out for themselves and other great graphs and statistics, go to the appendix section of Mark Mill’s paper The Energy Transition Delusion: A Reality Reset, published by the Manhattan Institute. That should be enough to find it on Google. It's definitely worth exploring. Mark, for that redemptive ending. We don't like to end with too much doom and gloom, although there's a lot of it around, but there is a redemptive ending here, isn't there? There is a solution. There is a zero-carbon, or close to zero-carbon form of energy, which is available. The fuel source is available in this country, and the technology has come on leaps and bounds. I'm talking about small modular reactors. That’s, right, isn't it?
Mark P. Mills: I'm a huge fan of nuclear energy in general, always have been. I worked in the nuclear industry early in my career. I worked for a uranium mining and refining company in Canada. I defended the virtues of nuclear energy after Three Mile Island, travelling the world, preaching the gospel of the benefits of nuclear energy. It's the single most consequential improvement in reducing our footprint on the planet. Nothing comes close. Rather than increasing by a thousand percent our footprint by going to wind and solar, which is what the materials footprint does, you decrease our materials footprint on the planet by a thousand percent by going nuclear. It's the only path that makes any sense as a significant share of the world's future electric supply.
Not that we'll have zero wind and solar. Wind and solar will have a very significant role. In fact, I would dare say, compared to where we are today, it's perfectly reasonable to think that the share of electricity globally, the average, will be more than double where it is today. Today the share of world's energy from wind and solar is about 3%, and the share of world's electricity from wind and solar is around 8%. It wouldn't be unreasonable to think that would double to about 16%. That would be quite something. It’d be quite remarkable. But that's not a transition, That's an addition.
If you want to transition a significant share of the world's electricity away from combustion, you're going to use nuclear and that won’t, quote, solve any magical problems, but it'll be quite consequential, and environmentally beneficial in that sense. Then the rest of the ecosystem, we just have to be patient. People are perfectly reasonably believing that some phenomenal changes are possible in the technology of energy supply and use. It's a perfectly reasonable expectation. That's sort of what's underlying a lot of this. The unreasonable thing to think is the velocity of the expectation. Big systems the size of our civilisation don't make rapid changes in decades, many decades.
Let me end with a plus and a minus. The minus for those who think we’ll have a good transition is that roughly 20 years and $5 trillion of spending in the Western nations have increased the share of the world's energy, from wind and solar, from zero, as I said, to 3% of the world's energy. But we get twice as much energy right now globally from burning wood—burning wood, the oldest energy source known to man—than we do from wind and solar combined globally. So it's a long, slow process, but the new technologies that are emerging and our capacity to innovate because of artificial intelligence, supercomputing in the cloud, which I wrote about in my book–which is a positive book, I'm very optimistic about these technologies–but they don't happen overnight. We just have to be patient, and maybe that's the resource that’s in short supply politically.
Nick Cater: Well, on that note, patience. A deficit of patience–we’re certainly facing one.
Thank you very much, Mark, for your time. We could have gone on, I'm sure. I'd like to return to this, check a few other, so-called facts against you down the track. Thank you for joining us. Your paper, The Energy Transition Delusion: A Reality Reset, published by the Manhattan Institute.