Don't Fall for the Renewable Energy Hype

Engineer Petr Kuznetsov inspects equipment at the Abakan solar electric station owned by Russian electricity firm EuroSibEnergo of En+ Group, in a suburb of the Siberian town of Abakan, in the Republic of Khakassia, Russia September 26, 2017. Picture taken September 26, 2017. REUTERS/Ilya Naymushin

Renewables have hidden costs that exceed their purported benefits.

An interesting report titled “10 Geopolitical Risks We Are Watching” was released in late October by BlackRock (BLK), the world’s largest publicly traded investment management firm. The report surmises, “that markets are calm but geopolitics are anything but.” Wind and solar energy—two leading renewable energy options—could possibly be a dangerous part of an energy mix as the world continues on a downward geopolitical scope because they aren’t as reliable the way coal, nuclear and natural gas are at this time.

Moreover, renewable energy is intermittent and unreliable, can only produce consistent energy under certain weather parameters and can only be stored at scale at this point in time. Renewable energy options are also tough on the environment because wind and solar energy requires the use of large tracts of land compared to conventional, reliable fossil fuel energy.

Renewables though are consistently publicized as growing more than fossil fuels, but that is misleading. Unless hydroelectricity is being produced under a controlled scenario with dammed water, then renewable energy is inferior to coal, nuclear and natural gas powered electricity. While renewables don’t emit carbon dioxide, they unfortunately may not be the solution to lower emissions when examined closer. This is where a dangerous geopolitical climate can arise for nations wholeheartedly pursuing renewables, because of their false promises, high costs and unreliability for unstable nations that need stable, secure and scalable energy that fossil fuels provide.

In a new paper by the Center of the American Experiment, titled “Energy Policy in Minnesota the High Cost of Failure,” chronicles Minnesota’s $15 billion experiment with wind energy over traditional fossil fuels. The result was that wind energy didn’t lower CO2 emissions and caused Minnesota’s price of electricity to rise above the national average for the first time on record. Imagine this on a larger scale—take Africa as an example—where 635 million Africans live without any form of modern energy at this time. This lack of scalable, affordable energy that fossil fuels and nuclear energy provide can be construed as a direct correlation for the inherent instability of Africa, its lower economic growth, higher rates of overpopulation and lacking the wherewithal to combat radicalization by groups like ISIS throughout the continent.

The reliable energy problem grows when you include figures by the International Energy Agency (IEA), stating that 1.2 billion people worldwide are also without power. If the United States still can’t figure out how to lower electricity costs using renewable energy then it is doubtful that others can at this time. This could be dooming over a billion people to higher costs they can’t afford, an unreliable energy supply and more than likely needing high emitting, coal-fired power plants as an energy backup. The smarter decision is to follow Warren Buffet's lead by investing in fossil fuel to help avert the geopolitical disasters that renewables could cause fragile nations in need of scalable, reliable energy options. The Energy Information Administration (EIA) has estimated that 77 percent of the world’s energy needs by 2040 will still be met by fossil fuels.

Electric vehicles (EVs) also run into the same geopolitical problems as renewable energy while also needing enormous government subsidies. Something that Mr. Buffet discovered when he bought a controlling stake in Pilot Flying J, the truck-stop chain that sells food, coffee and diesel to truckers on U.S.-cross country hauls. Mr. Buffet believes that EVs or autonomous vehicles won’t replace combustible engines powered by gasoline. He reiterated this stance on Bloomberg Television when he said: “Who knows when driverless trucks are going to come along and what level of penetration they have have?”