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By Gail
Tverberg -
Feb 10, 2023
The Fatal Flaw Of The Renewable Revolution
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Renewables are hailed as a potential solution to the world’s
energy problem, but it might not be as easy as simply installing
more turbines or solar panels.
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Renewable tech is incredibly complex and requires a lot of support
in order to function.
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Increasingly complex energy solutions are undoubtedly powerful and
promising, but in practice, they often result in more fuel use
rather than less.
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Many people believe that installing more wind turbines and solar
panels and manufacturing more electric vehicles can solve our energy
problem, but I don’t agree with them. These devices, plus the
batteries, charging stations, transmission lines and many other
structures necessary to make them work represent
a high level of complexity.
A relatively low level of complexity, such as the complexity embodied
in a new hydroelectric dam, can sometimes be used to solve energy
problems, but we cannot expect
ever-higher levels of complexity to always be achievable.
According to the anthropologist Joseph Tainter, in his well-known
book, The
Collapse of Complex Societies, there are diminishing
returns to added complexity. In other words, the most beneficial
innovations tend to be found first. Later innovations tend to be less
helpful. Eventually the energy cost of added complexity becomes too
high, relative to the benefit provided.
In this post, I will discuss complexity further. I will also present
evidence that the world economy may already have hit complexity
limits. Furthermore, the popular measure, “Energy
Return on Energy Investment” (EROEI) pertains to direct use of
energy, rather than energy embodied in added complexity. As a result,
EROEI indications tend to suggest that innovations such as wind
turbines, solar panels and EVs are more helpful than they really are.
Other measures similar to EROEI make a similar mistake.
[1] In this video
with Nate Hagens, Joseph Tainter explains how energy and
complexity tend to grow simultaneously, in what Tainter calls the
Energy-Complexity Spiral.
![](images/images_02_13_2023/pic4.jpg)
Figure 1. The Energy-Complexity Spiral from 2010
presentation called The
Energy-Complexity Spiral by
Joseph Tainter.
According to Tainter, energy and complexity build on each other. At
first, growing complexity can be helpful to a growing economy by
encouraging the uptake of available energy products. Unfortunately,
this growing complexity reaches diminishing returns because the
easiest, most beneficial solutions are found first. When the benefit
of added complexity becomes too small relative to the additional
energy required, the overall economy tends to collapse–something he
says is equivalent to “rapidly losing complexity.”
Growing complexity can make goods and services less expensive in
several ways:
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Economies of scale arise due to larger
businesses.
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Globalization allows use of alternative raw materials, cheaper labor
and energy products.
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Higher education and more specialization allow more innovation.
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Improved technology allows goods to be less expensive to
manufacture.
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Improved technology may allow fuel savings for vehicles, allowing
ongoing fuel savings.
Strangely enough, in practice, growing complexity tends to lead to
more fuel use, rather than less. This is known as Jevons’
Paradox. If products are less expensive, more people can afford
to buy and operate them, so that total energy consumption tends to be
greater.
[2] In the above linked video,
one way Professor Tainter describes complexity is that it is something
that adds structure and organization to a system.
The reason I consider electricity from wind turbines and solar panels
to be much more complex than, say, electricity from hydroelectric
plants, or from fossil fuel plants, is because the
output from the devices is further from what is needed to fill the
demands of the electricity system we currently have operating. Wind
and solar generation need complexity to fix their intermittency
problems.
With hydroelectric generation, water is easily captured behind a dam.
Often, some of the water can be stored for later use when demand is
high. The water captured behind the dam can be run through a turbine,
so that the electrical output matches the pattern of alternating
current used in the local area. The electricity from a hydroelectric
dam can be quickly added to other available electricity generation to
match the pattern of electricity consumption users would prefer.
On the other hand, the output of wind turbines and solar panels
requires a great deal more assistance (“complexity”) to match the
electricity consumption pattern of consumers. Electricity from wind
turbines tends to be very disorganized. It comes and goes according to
its own schedule. Electricity from solar panels is organized, but the
organization is not well aligned with the pattern of consumers prefer.
A major issue is that electricity for heating is required in winter,
but solar electricity is disproportionately available in the summer;
wind availability is irregular. Batteries can be added, but these
mostly mitigate wrong “time-of-day” problems. Wrong “time-of-year”
problems need to be mitigated with a lightly used parallel system. The
most popular backup system seems to be natural gas, but backup systems
with oil or coal can also be used.
This double system has a higher cost than either system would have if
operated alone, on a full-time basis. For example, a natural gas
system with pipelines and storage needs to be put in place, even if
electricity from natural gas is only used for part of the year. The
combined system needs experts in all areas, including electricity
transmission, natural gas generation, repair of wind turbines and
solar panels, and battery manufacture and maintenance. All of this
requires educational systems and international trade, sometimes with
unfriendly countries.
I also consider electric vehicles to be complex. One major problem is
that the economy will require a double system, (for internal
combustion engines and electric vehicles) for many, many years.
Electric vehicles require batteries made using elements from around
the world. They also need a whole system of charging stations to fill
their need for frequent recharging.
[3] Professor Tainter makes
the point that complexity has an energy cost, but this cost is
virtually impossible to measure.
Energy needs are hidden in many areas. For example, to have a complex
system, we need a financial system. The cost of this system cannot be
added back in. We need modern roads and a system of laws. The cost of
a government providing these services cannot be easily discerned. An
increasingly complex system needs education to support it, but this
cost is also hard to measure. Also, as we note elsewhere, having
double systems adds other costs that are hard to measure or predict.
[3] The energy-complexity
spiral cannot continue forever in an economy.
The energy-complexity spiral can reach limits in at least three ways:
[a] Extraction of minerals of
all kinds is placed in the best locations first. Oil wells
are first placed in areas where oil is easy to extract and close to
population areas. Coal mines are first placed in locations where coal
is easy to extract and transportation costs to users will be low.
Mines for lithium, nickel, copper, and other minerals are put in the
best-yielding locations first.
Eventually, the cost of energy production rises, rather than falls,
due to diminishing returns. Oil, coal, and energy products become more
expensive. Wind turbines, solar panels, and batteries for electric
vehicles also tend to become more expensive because the cost of the
minerals to manufacture them rises. All kinds of energy goods,
including “renewables,” tend to become less affordable. In fact, there
are many
reports that the cost of producing wind
turbines and solar
panels rose in 2022, making the manufacture of these devices
unprofitable. Either higher prices of finished devices or lower
profitability for those producing the devices could stop the rise in
usage.
[b] Human population tends to
keep rising if food and other supplies are adequate, but the
supply of arable land stays close to constant. This combination puts
pressure on society to produce a continuous stream of innovations that
will allow greater food supply per acre. These innovations eventually
reach diminishing returns, making it more difficult for food
production to keep up with population growth. Sometimes adverse
fluctuations in weather patterns make it clear that food supplies have
been too close to the minimum level for many years. The growth spiral
is pushed down by spiking food prices and the poor health of workers
who can only afford an inadequate diet.
[c] Growth in complexity
reaches limits. The earliest innovations tend to be most
productive. For example, electricity can be invented only once, as can
the light bulb. Globalization can only go so far before a maximum
level is reached. I think of debt as part of complexity. At some
point, debt cannot be repaid with interest. Higher education (needed
for specialization) reaches limits when workers cannot find jobs with
sufficiently high wages to repay educational loans, besides covering
living costs.
[4] One point Professor
Tainter makes is that if the available energy supply is reduced, the
system will need to simplify.
Typically, an economy grows for well over one hundred years, reaches
energy-complexity limits, and then collapses over a period of years.
This collapse can occur in different ways. A layer of government can
collapse. I think of the collapse of the central government of the
Soviet Union in 1991 as a form of collapse to a lower level of
simplicity. Or one country conquers another country (with
energy-complexity problems), taking over the government and resources
of the other country. Or a financial collapse occurs.
Tainter says that simplification usually doesn’t happen voluntarily.
One example he gives of voluntary simplification involves the
Byzantine Empire in the 7th century. With less funding available for
the military, it abandoned some of its distant posts, and it used a
less costly approach to operating its remaining posts.
[5] In my opinion, it is easy
for EROEI calculations
(and similar calculations) to overstate the benefit of complex types
of energy supply.
A major point that Professor Tainter makes in the talk linked above is
that complexity has an energy
cost, but the energy cost of this complexity is virtually impossible
to measure. He also makes the point that growing complexity
is seductive; the overall cost of complexity tends to grow over time.
Models tend to miss necessary parts of the overall system needed to
support a highly complex new source of energy supply.
Because the energy required for complexity is hard to measure, EROEI
calculations with respect to complex systems will tend to make complex
forms of electricity generation, such as wind and solar, look like
they use less energy (have a higher EROEI) than they actually do. The
problem is that EROEI calculations consider only direct “energy
investment” costs. For example, the calculations are not designed to
collect information regarding the higher energy cost of a dual system,
with parts of the system under-utilized for portions of the year.
Annual costs will not necessarily be reduced proportionately.
In the linked video, Professor Tainter talks about the EROEI of oil
over the years. I don’t have a problem with this type of comparison,
especially if it stops before the recent change to greater use of
fracking, since the level of complexity is similar. In fact, such a
comparison omitting fracking seems to be the one that Tainter makes.
Comparison among different energy types, with different complexity
levels, is what is easily distorted.
[6] The current world economy
already seems to be trending in the direction of simplification,
suggesting that the tendency toward greater complexity is already past
its maximum level, given the lack of availability of inexpensive
energy products.
I wonder if we are already starting to see simplification in trade,
especially international trade, because shipping (generally using oil
products) is becoming high-priced. This might be considered a type of
simplification, in response to a lack of sufficient inexpensive energy
supply.
![](images/images_02_13_2023/pic5.jpg)
Figure 2. Trade as a percentage of world GDP, based on data of the
World Bank.
Based on Figure 2, trade as a percentage of GDP hit a peak in 2008.
There has been a generally downward trend in trade since then, giving
an indication that the world economy has tended to shrink back, at
least in some ways, as it has hit high-price limits.
Another example of a trend toward lower complexity is the drop in US
undergraduate college and university enrollment since 2010. Other
data shows that undergraduate enrollment nearly tripled between
1950 and 2010, so the shift to a downtrend after 2010 presents a major
turning point.
![](images/images_02_13_2023/pic6.jpg)
Figure 3. Total number of US full-time and part-time undergraduate
college and university students, according to
the National
Center for Education Statistics.
The reason why the shift in enrollment is a problem is because
colleges and universities have a huge amount of fixed expenses. These
include buildings and grounds that must be maintained. Often debt
needs to be repaid, as well. Educational systems also have tenured
faculty members that they are obligated to keep on their staff, under
most circumstances. They may have pension obligations that are not
fully funded, adding another cost pressure.
According to the college faculty members whom I have talked to, in
recent years there has been pressure to improve the retention rate of
students who have been admitted. In other words, they feel that they
are being encouraged to keep current students from dropping out, even
if it means lowering their standards a little. At the same time,
faculty wages are not keeping pace with inflation.
Other information suggests that colleges and universities have
recently put a great deal of emphasis on achieving a more diverse
student body. Students who might not have been admitted in the past
because of low high school grades are increasingly being admitted in
order to keep the enrollment from dropping further.
From the students’ point of view, the problem is that jobs that pay a
sufficiently high wage to justify the high cost of a college education
are increasingly unavailable. This seems to be the reason for both the
US student debt crisis and the drop in undergraduate enrollment.
Of course, if colleges are at least somewhat lowering their admission
standards and perhaps lowering standards for graduation, as well,
there is a need to “sell” these increasingly diverse graduates with
somewhat lower undergraduate achievement records to governments and
businesses who might hire them. It seems to me that this is a further
sign of the loss of complexity.
[7] In 2022, the total energy
costs for most OECD countries started spiking to high levels, relative
to GDP. When we analyze the situation, electricity prices are spiking,
as are the prices of coal and natural gas–the two types of fuel used
most frequently to produce electricity.
![](images/images_02_13_2023/pic7B.jpg)
Figure 4. Chart from article called, Energy
expenditures have surged, posing challenges for policymakers,
by two OECD economists.
The OECD is
an intergovernmental organization of mostly rich countries that was
formed to stimulate economic progress and foster world growth. It
includes the US, most European countries, Japan, Australia, and
Canada, among other countries. Figure 4, with the caption “Periods of
high energy expenditures are often associated with recession” is has
been prepared by two economists working for OECD. The gray bars
indicate recession.
Figure 4 shows that in 2021, prices for practically every cost segment
associated with energy consumption tended to spike. Electricity, coal,
and natural gas prices were all very high relative to prior years. The
only segment of energy costs that was not very out of line relative to
costs in prior years was oil. Coal and natural gas are both used to
make electricity, so high electricity costs should not be surprising.
In Figure 4, the caption by the economists from OECD is pointing out
what should be obvious to economists everywhere: High energy prices
often push an economy into recession. Citizens are forced to cut back
on non-essentials, reducing demand and pushing their economies into
recession.
[8] The world seems to be up
against extraction limits for coal. This, together with the high cost
of shipping coal over long distances, is leading to very high prices
for coal.
World coal production has been close to flat since 2011. Growth in
electricity generation from coal has been almost as flat as world coal
production. Indirectly, this lack of growth in coal production is
forcing utilities around the world to move to other types of
electricity generation.
![](images/images_02_13_2023/pic8.jpg)
Figure 5. World coal mined and world electricity generation from coal,
based on data from
BP’s 2022
Statistical Review of World Energy.
[9] Natural gas is now also in
short supply when growing demand of many types is considered.
While natural gas production has been growing, in recent years it
hasn’t been growing quickly enough to
keep up with the world’s rising demand for natural gas imports. World
natural gas production in 2021 was only 1.7% higher than production in
2019.
Growth in the demand for natural gas imports comes from several
directions, simultaneously:
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With coal supply flat and imports not
sufficiently available, countries are seeking to substitute natural
gas generation for coal generation of electricity. China is the
world’s largest importer of natural gas partly for this reason.
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Countries with electricity from wind or solar find that electricity
from natural gas can ramp up quickly and fill in when wind and solar
aren’t available.
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There are several countries, including Indonesia, India and
Pakistan, whose natural gas production is declining.
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Europe chose to end its pipeline imports of natural gas from Russia
and now needs more LNG instead.
[10] Prices for natural gas
are extremely variable, depending on whether the natural gas is
locally produced, and depending on how it is shipped and the type of
contract it is under. Generally, locally produced natural gas is the
least expensive. Coal has somewhat similar issues, with locally
produced coal being the least expensive.
This is a chart from a recent Japanese publication (IEEJ).
![](images/images_02_13_2023/pic9.jpg)
Figure 6. Comparison of natural gas prices in three parts of the world
from the Japanese publication
IEEJ,
dated January 23, 2023.
The low Henry Hub price at the bottom is the US price, available only
locally. If supplies are high within the US, its price tends to be
low. The next higher price is Japan’s price for imported liquefied
natural gas (LNG), arranged under long-term contracts, over a period
of years. The top price is the price that Europe is paying for LNG
based on “spot market” prices. Spot market LNG is the only type of LNG
available to those who did not plan ahead.
In recent years, Europe has been taking its chances on getting low
spot market prices, but this approach can backfire badly when there is
not enough to go around. Note that the high price of European imported
LNG was already evident in January 2013, before the Ukraine invasion
began.
A major issue is that shipping natural gas is extremely expensive,
tending to at least double or triple the price to the user. Producers
need to be guaranteed a high price for LNG over the long term to make
all of the infrastructure needed to produce and ship natural gas as
LNG profitable. The extremely variable prices for LNG have been a
problem for natural gas producers.
The very high recent prices for LNG in Europe have made the price of
natural gas too high for industrial users who need natural gas for
processes other than making electricity, such as making nitrogen
fertilizer. These high prices cause distress from the lack of
inexpensive natural gas to spill over into the farming sector.
Most people are “energy blind,” especially when it comes to coal and
natural gas. They assume that there is plenty of both fuels to be
cheaply extracted, essentially forever. Unfortunately, for
both coal and natural gas, the cost of shipping tends to be very high.
This is something that modelers miss. It is the high delivered
cost of natural gas and coal that makes it impossible for
companies to actually extract the amounts of coal and natural gas that
seem to be available based on reserve estimates.
[10] When we analyze
electricity consumption in recent years, we discover that OECD and
non-OECD countries have had amazingly different patterns of
electricity consumption growth since 2001.
OECD electricity consumption has been close to flat, especially since
2008. Even before 2008, its electricity consumption was not growing
rapidly.
The proposal now is to increase the use of electricity in OECD
countries. Electricity will be used to a greater extent for fueling
vehicles and heating homes. It will also to be used more for local
manufacturing, especially for batteries and semiconductor chips. I
wonder how OECD countries will be able to ramp up electricity
production sufficiently to cover both current uses of electricity and
planned new uses, if past electricity production has been essentially
flat.
![](images/images_02_13_2023/pic10.jpg)
Figure 7. Electricity production by type of fuel for
OECD countries, based on data from BP’s 2022
Statistical Review of World Energy.
Figure 7 shows that coal’s share of electricity production has been
falling for OECD countries, especially since 2008. “Other” has been
rising, but only enough to keep overall production flat. Other is
comprised of renewables, including wind and solar, plus electricity
from oil and from burning of trash. The latter categories are small.
The pattern of recent energy production for non-OECD countries is very
different:
![](images/images_02_13_2023/pic11.jpg)
Figure 8. Electricity production by type of fuel for non-OECD
countries, based on data from
BP’s 2022
Statistical Review of World Energy.
Figure 8 shows that non-OECD countries have been rapidly ramping up
electricity production from coal. Other major sources of fuel are
natural gas and electricity produced by hydroelectric dams. All these
energy sources are relatively non-complex. Electricity from locally
produced coal, locally produced natural gas, and hydroelectric
generation all tend to be quite inexpensive. With these inexpensive
sources of electricity, non-OECD countries have been able to dominate
the world’s heavy industry and much of its manufacturing.
In fact, if we look at the local production of fuels generally used to
produce electricity (that is, all fuels except oil), we can see a
pattern emerge.
![](images/images_02_13_2023/pic12.jpg)
Figure 9. Energy production of fuels often used for electricity
production for OECD countries, based on data from
BP’s 2022
Statistical Review of World Energy.
With respect to extraction of fuels often associated with electricity,
production has been closed to flat, even with “renewables” (wind,
solar, geothermal, and wood chips) included. Coal production is down.
The decline in coal production is likely a big part of the lack of
growth in OECD’s electricity supply. Electricity from locally produced
coal has historically been very inexpensive, bringing the average
price of electricity down.
A very different pattern emerges when the production of fuels used to
generate electricity for non-OECD countries is viewed. Note that the
same scale has been used on both Figures 9 and 10. Thus, in 2001, the
production of these fuels was about equal for OECD and non-OECD
countries. Production of these fuels has about doubled since 2001 for
non-OECD countries, while OECD production has remained close to flat.
![](images/images_02_13_2023/pic13.jpg)
Figure 10. Energy production of fuels often used for electricity
production for non-OECD countries, based on data from BP’s 2022
Statistical Review of World Energy.
One item of interest on Figure 10 is coal production for non-OECD
countries, shown in blue at the bottom. It has been barely increasing
since 2011. This is part of what is now tightening world coal
supplies. I am doubtful that spiking coal prices will add very much to
long-term coal production because truly local supplies are becoming
depleted, even in non-OECD countries. The spiking prices are much more
likely to lead to recession, debt defaults, lower commodity prices,
and lower coal supply.
[11] I am afraid that the
world economy has hit complexity limits as well as energy production
limits.
The world economy seems likely to collapse over a period of years. In
the near term, the result may look like a bad recession, or it may
look like war, or possibly both. So far, the economies using fuels
that are not very complex for electricity (locally produced coal and
natural gas, plus hydroelectric generation) seem to be doing better
than others. But the overall world economy is stressed by inadequate
cheap-to-produce local energy supplies.
In physics terms, the world economy, as well as all of the individual
economies within it, are dissipative
structures. As such, growth followed by collapse is a usual
pattern. At the same time, new versions of dissipative structures can
be expected to form, some of which may be better adapted to changing
conditions. Thus, approaches for economic growth that seem impossible
today may be possible over a longer timeframe.
For example, if climate change opens up access to more coal supplies
in very cold areas, the Maximum
Power Principle would suggest that some economy will eventually
access such deposits. Thus, while we seem to be reaching an end now,
over the long-term, self-organizing systems can be expected to find
ways to utilize (“dissipate”) any energy supply that can be
inexpensively accessed, considering both complexity and direct fuel
use.
By Gail Tverberg
Green Play Ammonia™, Yielder® NFuel Energy.
Spokane, Washington. 99212
www.exactrix.com
509 995 1879 cell, Pacific.
Nathan1@greenplayammonia.com
exactrix@exactrix.com
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