Here’s the Real Cost of Going Green

By Chris MacIntosh

Has anyone thought about the cost of “connecting and integrating” the grid? What about reserve backup? Even the CEO of Germany’s EON is now speaking out:

From the article:

Europe’s renewable power push will be a “big mistake” unless it significantly increases investment in the continent’s electricity grid to cope with mismatches in supply and demand, warns the chief executive of European energy major Eon.

Leonhard Birnbaum, who took over last month as president of Eurelectric, the European electricity industry body, said the accelerated installation of wind turbines and solar panels across the EU as the bloc tries to wean itself off Russian fossil fuels was creating bottlenecks that the grid was not designed to cope with.

To support the rapid increase in renewables, Eurelectric estimates that investment in the grid needs to increase by between 50 and 70 per cent to reach €34bn-€39bn a year by 2030.

“If we accelerate renewables, we need to accelerate the grid,” Birnbaum said. “If we accelerate renewables only, we are making a big mistake.”

Despite Europe having younger and generally more resilient electricity grids than the US, he said, reserve capacity designed to offset shortages when the weather is not optimal for renewable power was already stretched by the number of wind turbines and solar panels that had been brought online since the war in Ukraine started.

“We have been adding renewables, often using up reserves which we traditionally had in the grid . . . we built a system with lots of reserves. The reserve is gone,” Birnbaum said.

This is all about adding intermittent electricity to a grid designed primarily for baseload. For all the talk of solar and wind you can virtually hear a pin drop when it comes to discussion about baseload backup let alone how much this is all going to cost.

The common narrative is that the world will be using less coal, natural gas, and oil in 5, 10, 20 years from now. For all the many reasons we’ve pointed out before, we believe this is a grand delusion. Hogwash. Hence the reason why we keep banging on about investing in businesses within the energy sector that will benefit from a “gradual awakening from the grand delusion” and that is a pickup in capex in oil and gas exploration and development.

Meanwhile, oil & gas funding is halted

This isn’t a grand revelation but rather a gentle reminder of one of the big impediments to a big increase in oil, gas, and coal supply coming online before 2030 at least, namely funding for new exploration and developments.

This isn’t HSBC operating on its own, rather it highlights the ideology that has gripped Western banks.

How the West has been radicalized by the “woke” movement is beyond us, but Bruce Hornsby once sang, “It’s just the way it is.”

HSBC Holdings Plc will no longer finance new oil and gas fields or related infrastructure in a move that climate activists say puts it ahead of many peers in addressing global warming.

The London-based bank announced the move on Wednesday as part of an update to its energy policy, which it said had been informed by “scientific and international bodies” and analysis of pathways that will limit the global temperature rise to 1.5C. The new policy covers both loans and debt underwriting, the bank said.

HSBC is among the biggest financiers of fossil fuels companies, providing $111 billion of debt since the Paris climate agreement was signed in late 2015, the second highest among European lenders, according to data compiled by Bloomberg. As a result the firm has been slammed by climate activists, with its Canary Wharf headquarters the target of frequent protests. It’s also faced a shareholder vote on its support of the fossil-fuel industry.

The new policy announced on Wednesday “shows the way for other banks,” especially those that “claim that they are climate leaders but which continue to finance oil and gas companies,” said Lucie Pinson, director of environmental nonprofit Reclaim Finance. While Pinson said HSBC should clarify whether or when financing for oil and gas developers will be stopped, other banks should follow its lead and “stand strong behind 1.5C.

We aren’t too worried about this woke Global Warming ideology. It is in part a reflection of a bored self-indulgent and naive society in Western nations, which have been easily co-opted into believing the Malthusian eugenicists in Davos and their Hegelian dialectic climate catastrophe fear porn. It reminds me of how people worry about the smallest stupidest things when they’ve nothing material to worry about. The irony is that by doing so they’ve neglected and now ensured situations that truly are worrisome.

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