After the Bell: The way people misunderstand renewable power is shocking

13 Dec 2022

I can’t get away from the feeling that the constant, relentless defence of coal has a larger agenda somewhere behind it.

How do we comprehend the resistance among key ANC senior members to environment-friendly energy sources? There are political reasons of course; the coal supply chain is now heavily dominated by businesspeople who have a huge incentive to keep coal front and centre of SA’s energy profile. But there is also a lot of resistance to solar and wind power among the cognoscenti generally, both inside and outside of the political realm. A good example is former Eskom CEO Jacob Maroga, who is on Twitter almost every day angrily arguing the case for coal.

For instance, his tweet on Monday, apropos of very little, that: “The German Energy Transition going very well. Powered by King Coal and Gas”. Alongside the tweet is a measure of German electricity consumption, which shows the power generated by coal at 30GW, and gas at about 17GW, with solar and wind at about 8GW combined. The “going very well” comment is obviously sarcastic.

It’s hard to know what this is supposed to prove; everybody knows that the world is still dependent on coal power. That’s exactly the core of the problem. Pointing out that “king coal” is still crucial strikes me as a bit of a straw man argument. Doubtless, there is value in making its contribution plain, but I can’t get away from the feeling that the constant, relentless defence of coal has a larger agenda somewhere behind it.

Neither are his objections without value; they are just so dated. Of course, renewable energy is variable; who doesn’t know that? Triumphantly, Maroga cites the fact that UK electricity prices have soared to record highs as solar and wind output has slumped. In a different tweet, he claims the UK national grid was powered 57% by fossil fuels and 7% by renewables. He claims installed wind capacity is 39GW “but only 1.47GW available”, citing the UK national grid’s live tracking website. A good example of “When the wind is not blowing & the sun is not shining”, he points out.

Yes, obviously. But the same data source produces a tally for different time periods and includes the average production for the year. That shows that wind in the UK has produced about 28% of the country’s energy needs on average through the year, generating about 8.5GW at any one time. That figure is just a click away. On the same website!

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I’m not necessarily intending to single Moroga out; he is just a good example of conversations I had with many people who are enormously sceptical about renewable energy, often just out of a gut feeling rather than any data. At least Moroga is data-centric, if selectively. Sometimes, you sense that it is a broader political issue: renewable energy is one of those things those horrible woke people with their endless placards are constantly going on about. But us old owls know the truth; coal is king! Etc.

But there is a more important reason, I think: people generally have a poor understanding of just how fast renewable energy has developed over the last decade. There is a great article on the site Our World In Data on how and why that happened. The brief version is that circa 2009, the levelised cost of electricity from utility-scale solar photovoltaics cost $359 per MWh. The levelised costs include the costs of construction and the ongoing costs of production. It’s the fairest comparison of different electricity sources.

That cost has come down to now $40 per MWh, marginally cheaper than wind power. That change, therefore, occurred at a truly extraordinary pace, much, much faster than people’s guts generally tell them. The speed of change is a testament to the new speed of technological change that we see in all kinds of industries. The cycle of knowledge, the learning rate, and the production efficiency rate are all eye-watering in certain select industries in the modern era. Think of chip development and biogenetics. Inventions in some areas tend to compound on top of each other. Consequently, it is hard to truly appreciate the significance of this acceleration, so we tend to get caught in old mindsets very quickly.

And yet some don’t change. Over the same period, coal power’s cost has been flat, at around $109 per MWh, while the cost of nuclear power has risen by 26% to $155 per MWh. But why did coal power not experience the same acceleration of discovery? Mainly because it’s so old there is actually little room for improving the efficiency of coal power plants substantially, Max Roser, the founder of Our World in Data speculates. In addition, since the cost of coal power is so dependent on the price of coal, the chances it will get cheaper in the future are small.

So, the cost of solar energy is now a quarter of nuclear, and less than half that of coal. Be honest, did you know that? Of course, this doesn’t take into account all kinds of things Moroga rightly points out: energy variability, sunk costs, systems operation, wheeling, and all kinds of important technical issues. And it’s worth noting that gas power has become a lot cheaper over the past decade too.

But surely the utility of solar and wind power, and its low cost, never mind the environmental issues, should make us all supporters at a fundamental level? Obviously, there will need to be an energy mix in which coal will remain a component for much longer than we would like, but the continued support for fossil fuel energy is not only environmentally careless, it’s financially mystifying. It invites suspicion of ulterior motives because the only other alternative would be wilful ignorance. DM/BM

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