Photo by Mitch: Flickr

I loved the true story of the Nigerian energy worker who, having received a pay check for $900, amended the figure to read $9,000. As the reporter wittily put it, “The check fraud proved entirely successful ... right up to the point where he attempted to cash it.” That’s kind of how I feel about the renewable energy revolution. It will prove entirely successful in the eyes of the public and media -- right up to the point where the lights start going out. And those lights will soon start going out, according to a new report.

I fully understand the romantic attraction of the clean energy revolution and the rush to replace ‘dirty’ fossil fuels. In the light of the war on carbon it’s a no brainer, right? Which is precisely why, just as diminishing EU and UK subsidies are prompting an industry exodus westward, the British renewables industry may be about to be given an unexpected investment shot in the arm from some of the world’s biggest multinational companies in one of the biggest analogs to the adage “I gave at the church,” in this case the environmentalism church. Companies, it seems, in their rush to appear politically correct are oblivious to how that renewable revolution is ushering in a new dark age in Britain.

Why the multinationals?

Speaking at a UK Confederation of British Industries (CBI) conference in October, the Bank of America’s head of power and utilities, John Lynch, named companies like Google, Microsoft, Wal-Mart and IKEA (the Swedish home goods company) as being potential new investors for Britain’s offshore wind industry. “This is the technology that the UK is leading in, and these companies are looking at ways to get involved,” Lynch told his CBI audience, “because it meets their own corporate social responsibility objectives.” Enthusing over the prospect of a massive new injection of funds for British industry, Lynch noted how the Crown Estate (which owns the UK seabed) had launched the offshore program specifically to enable Britain to meet its target of 80 percent cuts in carbon emissions by 2050 compared with 1990 levels. Clearly nobody had told Lynch that in recent weeks the leaders of Britain’s biggest energy companies privately warned the government that its climate targets, contingent upon renewable sources replacing hydrocarbon fuels, are “illusory” and “delusional.”

Not that the sudden growing corporate sense of responsibility should be seen in entirely philanthropic terms. The greater motivating factor is the spectre of national climate bills, post-Copenhagen in December, when their low carbon commitments will need to be demonstrated. And what could be more credible than investing in the world’s premier energy experiment?

But I wonder if the promoters of renewables might not think twice given so many UK energy insiders are predicting an impending national energy crisis? A crisis brought on by a UK energy policy based on achieving the economically non-viable, the geographically unacceptable, and, ultimately and most crucially, the mathematically impossible.

As regards to the economically-non-viable, we might begin by noting there would be no renewable energy revolution at all if it were not for government subsidies fuelling it. Quite simply, no business or private equity investor in his right mind would invest in a loss-making business with such an appallingly poor rate of return.

That is why, just a few weeks ago the UK saw its only turbine manufacturer close the door of a major plant, citing low demand, public opposition and diminishing government revenue. Note how public opposition – the geographical unacceptability – has seen UK land-based wind farm applications mired in planning battles, leaving only the even more expensive offshore option. What does this presage for those nations with less available seabed, I wonder? More generally, the non-viability of renewables, and wind power specifically, as a serious commercial proposition has been demonstrated time and again. Wind’s unreliability, its need for (mostly gas turbine) back-up facilities, the problem of storage in times of over-capacity and the fact that it will not save at all on natural gas use, combine to present a formidable technological obstacle.

But while the, oft-hidden, costs associated with all renewable energies on closer inspection should prove prohibitive and potentially economy-busting, the intellectual axe for the renewables revolution finally falls when basic math proves that it makes no economic sense at all. In his brilliant essay Understanding E=mc2, William Tucker helpfully applies the understanding of energy = mass to the issue of renewables. Above all he demonstrates why renewables, and wind and water specifically, are mathematically unable to produce the industrial scale energy power essential to keeping the lights on in any industrialized society.

Tucker explains, “Wind and water are matter in motion that we harness to produce energy.” In a nutshell, what Tucker shows is that the density of mass in both wind and water, being critically far less than oil, coal and gas, is simply unable to produce anything approaching a reasonable energy output. Tucker calculates, for instance, that a land mass of about 375 square miles with around 660 widely spaced windmills would be necessary to get a power return of just 1,000MW, the production capacity of one large hydrocarbon-powered facility. (With offshore wind turbines associated problems of distance, leakage and maintenance costs must all be significantly scaled up.) Put bluntly, Tucker shows that industrial scale renewable energy is, realistically and mathematically, an economic non-starter.

Ironically, just as UK and European subsidy opportunities are dwindling and the revolution faltering, the retail multinationals may be about to reinvigorate the flagging UK program. And as the economic cost of renewables is being counted across Europe, Britain’s energy-climate policy is likely to be touted increasingly as the blueprint for others to follow. A rash of UK studies continue to sound alarm bells over the government’s current energy direction and, one of these, just published, should do the same well beyond UK shores.

Does it really take an Einstein?

In October, the UK energy regulator, Ofgem (The Office of Gas and Electricity Markets), warned that Britain was facing 1970s style power blackouts within just four years – a much shorter timescale than previously thought. Project Discovery cited the British government’s failure to renovate its “crumbling power infrastructure” due to compliance with new EU rules that will force the closure of a quarter of the country’s power stations by 2015. In a typically British understatement, Alistair Buchanan, Ofgem’s chief executive warned, “There could be a potential shortfall in the period 2013-18 ... Life might be pretty cold.” Buchanan’s assessment is that only an “involuntary curtailment of demand” – power cuts – can conserve household supplies, unless the government acts urgently to upgrade its nuclear plants. Jeremy Nicholson, of the Energy Intensive Users Group, representing some of Britain’s biggest manufacturers, said that power cuts that hit UK business first would present a “material threat to heavy industry.” Nicholson also warned that once the crisis hit the 60 percent hike in British energy bills currently being acknowledged by the government will, more realistically, hit the 120 percent mark.

Bottom line? If Einstein’s E=mc2 as it applies to renewable energy doesn’t cut the intellectual ice for prospective investors and foreign governments alike, perhaps another will. Try this:

UK energy-climate policy, circa 2009 = a blueprint for black-outs.

See what I mean about a fraudulent check being entirely successful right up to the point of cashing it?