In this issue:
- Renewable energy will fail. I’ve found the scapegoat.
- The weakest link of the energy transition isn’t renewables
- Some industries rely on impossible levels of government spending
We haven’t had anything nice to say about renewable energy for a very long time. But I’ve had a change of heart. It’s time to give them a break. Today, I’d like to blame someone else for the coming failure of renewables.
The upcoming issue of The Fleet Street Letter is dedicated to the weakest link of the renewables rollout. It features a coming crisis so severe that it can’t help but be an opportunity. Surprisingly enough, it has nothing to do with renewables themselves. At least, not directly.
The thing is, my friend Sam Volkering has beaten me to the punchline. He’s found a way you could actually profit from the crunch I’ve identified. Before I show it to you, here’s an excerpt from The Fleet Street Letter’s current rough draft to explain the situation…
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Have you ever travelled to another country only to discover you didn’t bring the plug adaptors? Or that the local voltage is too high or too low for your devices to use?
Have you ever bought a new appliance, only to discover its cord doesn’t quite reach as far as the power socket… and you don’t have a spare extension lead? When I checked into a hotel in Kosovo, I discovered the place didn’t have any sockets at all!
Governments are discovering that they’ve made these mistakes with their precious energy transition. They’ve subsidised, planned and built an extraordinary amount of renewable energy… but forgot about the grid needed to actually move all the electricity around.
As a result, energy markets are overflowing with renewables projects waiting for permission to join a grid that doesn’t exist.
Waiting times to connect renewable energy projects are soaring by orders of magnitude. In one part of the US, the waiting time is over eight years. In the UK, it’s ten. Some solar projects were quoted 20 years least year. A truly vast amount of electricity generation is waiting to link up. In the US, connection requests amount to more power capacity than the country’s entire existing capacity!
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The monthly issue goes on to analyse just how big the electricity grid would need to be to make renewables viable. And whether we’re on track to reach that goal.
Let’s just that that it was an immensely amusing piece to write…
The reason I’m showing you this is simple. The opportunity to profit from it may be triggered soon. And that means you need to position yourself to potentially profit today.
Here’s how.
Why the grid is the weakest link
Not all forms of electricity need a big grid. Some can be built where the power is needed. Or where the existing grid is already in place. This minimises the costs and delays involved.
Renewables, meanwhile, need to be built where the power source is optimal. But that’s hardly convenient for power users.
Not only that, but renewables’ intermittency adds another challenge that necessitates building an even bigger grid. The theory is that renewables across the UK are unlikely to be intermittent at the same time. Therefore, a grid that can move power from one end of the country to the other combats intermittency.
It works well, in theory. Until winter comes along. Or an anti-cyclone sits above all of Europe. But that’d be due to climate change, of course.
Relying on a vast grid also adds another point of potential error. In 2019, large parts of the UK experienced a blackout because part of the grid was hit by lighting. More than a million “customers” were disconnected across England, Wales and Scotland.
A lightning strike did that much damage!?
A bigger and more inter-reliant grid increases the chances of such a crisis and its severity when this sort of thing happens. A lighting strike in Scotland could impact power in Devon.
Not to mention the geopolitical implications of relying on power cables at the bottom of the North Sea. Just ask the Germans about their gas pipeline…
If we were to rely on power that is dispatchable, meaning we control it rather than the weather, the grid wouldn’t need to be anywhere near as big. We wouldn’t need to connect disparate parts of the country to cover for each other during down times.
We also wouldn’t need to upgrade the existing grid for all sorts of other complex challenges that renewables create. For example, updating the grid to handle power that flows both ways to allow for solar installations on people’s roofs. Or including energy storage at strategic points on the grid.
It’s a right mess.
If only we had a source of carbon-free base load power that can be plonked into the existing grid. Something that investors could buy into…
Who pays for all this?
Of course, none of the costs of the grid are currently carried by renewable energy projects. Let alone attributed to them in cost estimates for renewables.
Instead, just as we simply assume the grid will have lots of renewables, we just assume that the grid to support them will get built regardless. And so the cost is unavoidable either way. It’s considered a “sunk cost,” as economists call it.
The question is, where is all this money going? You see, for industries reliant on government spending, cost means revenue. And so it’s a good thing that providing power is becoming ever more expensive. It’s a good thing that it requires vast infrastructure projects like a huge electricity grid. It’s a good thing if costs overrun.
Whether we actually need any of this is just an awkward question to those urging us to build the new grid.
No wonder they’re pretending it’s all viable. They’ve tricked governments into building enough renewables to now necessitate building the grid needed to connect them all.
And with renewable energy projects queuing up across the country, the reckoning has finally arrived. The bill will now come due. Governments will have to pay up for the new grid, whatever the cost.
Either we kick off construction on a truly vast grid that can handle those renewables very soon, or we do this.
Until next time,
Nick Hubble
Editor, Fortune & Freedom
