• Renewables are not cheap after all
  • How interest rates popped the green bubble
  • Why fossil fuels have a cost advantage

My book, which holds my strong beliefs about net zero’s upcoming failure, was completed months before the recent struggles of the wind industry. But it predicted them rather well, as you’ll see from the two excerpts below.

The first tackles the way in which renewables, like wind and solar, are different from fossil-fuel energy, while the second links this difference to the crucial factor that has recently changed: interest rates.

In short, renewables may be free to run, but they’re expensive to set up. In an age of zero percent interest rates, this setup cost was negligible. Today, interest rates have ripped the heart out of the wind energy industry.

Here’s how I predicted this months ago…


Experts describe it as the process of going from a liquid and gas-based system to a solid. Which is painfully obscure until you understand what

they really mean…

From fuel to foundations

Right now, we use up fuel to power things. We shovel coal into furnaces, pump petrol into our cars and gas into our heating systems. The key consideration in such a system is the cost, density, availability and distribution of the fuel used, more so than the cost of building the engines and turbines which actually use the fuel.

That is why, when you read the news, you see reports about the price of petrol, oil, gas and coal, not the price of building a refinery or turbine which uses these fuels.

With the exception of biomass, renewable energy does not use fuel to operate. Solar panels just sit in the sun, wind turbines stand in the wind and dams clog up the river. Which sounds like a good trade-off. Some argue it means essentially free energy.

But, instead of requiring constant refuelling, green energy requires vast amounts of resources to set up in the first place. After that, they are indeed low cost and demand few resources to operate… until they need replacing with another huge load of resources.

Nuclear power, by the way, is an interesting in-between. Uranium fuel is technically required to power reactors, but it is a small part of the cost of building and running a nuclear plant, and its energy density is so high that its cost is a relatively minor consideration. Instead, it is the cost of building and eventually decommissioning a plant that dominates the pricing, more like renewable energy.

But back to the implications of transitioning from fossil fuels to renewable energy: green energy infrastructure is vastly more resource intensive to set up than fossil fuel equivalents, has a huge upfront cost which needs to be financed, but provides cheap power thereafter.


In an age of zero percent interest rates, with central banks both printing absurd amounts of money and making climate change part of their remit, it might’ve been possible to find the money to finance a vast amount of green energy projects. Perhaps even a vast number of mines, if you assume away all the challenges of finding an economically viable zero-emissions mine to finance.

However, that era of easy money is over. Interest rates are back above zero, which means that both green energy projects and mines have a higher hurdle for finding financing. Companies must now be profitable enough to repay their lenders plus a profit margin for the investors.

As discussed earlier, and examined in more detail in the next section, green energy infrastructure tends to be very expensive to set up and very low cost thereafter, because it doesn’t use ongoing fuel inputs. This means they are especially sensitive to interest rate changes because they need a lot of upfront financing that must be repaid from future earnings. A wind farm that is profitable at 0% interest rates may not be at 4%. The cost of replacing a wind farm built in a 0% world has gone up dramatically too.

Should the net zero transition infrastructure succeed in being built somehow, it is likely the marginal price of energy will be low because the marginal cost of producing it is low, and because of the vast amount of surplus capacity needed to meet peak demand during dark and wind-free periods. All this reduces expected revenues for the owners.

Depreciation would, however, be very high because of the comparatively short life of renewable energy projects and the need to rebuild and refinance them.

It’s a nightmarish combination for renewable energy plant owners who were reaping vast profits based on electricity prices that are linked to gas prices. A link that would likely disappear in the future, leaving the price at the marginal cost of renewable electricity – near free.

Green tech projects that were viable a few years ago at cheap interest rates are no longer viable. That is why many companies are suffering severe write-downs on their green projects already. In 2022, as interest rates took off, green energy company share prices crashed. In 2023, banks catering to green tech firms in California went bust.

Finding the money to make net zero happen in a non-zero interest rate environment will be a major challenge which is not being properly considered by advocates. By implication, substantial taxpayer subsidies of some kind could be required indefinitely.


Sure enough, that’s precisely what’s in the news today: government support for wind farm developers that are running for the hills from projects that are no longer profitable and having to take vast write-downs on their existing projects.

Free energy from free money? What could possibly have gone wrong?

To find out what else could be in store for net zero, check out my book here.

Until next time,

Nick Hubble
Editor, Fortune & Freedom