- Net zero was never plausible
- So, why are we trying it anyway?
- What happens when we fail miserably?
History is full of vast endeavours that ignominiously faded into… well, history. Attempts to eradicate poverty, making the world safe for democracy, price controls to stop inflation, ideologies like communism, hydrogen-fuelled cars in the 90s… there’s a huge list of misguided efforts that took the world by storm and then fizzled out before they came to fruition.
When I first began predicting the unravelling of net zero, I compared it to the Children’s Crusade. There are a surprising number of parallels between the two campaigns. But at least the kids’ effort got off the ground, with some devout French and German children making their pilgrimage to the Holy Land and getting as far as… Genoa.
Net zero, on the other hand, seems to be imploding before it even began in earnest. One day, we may look at the green dream as nothing more than the most expensive form of entertainment ever devised by humans.
After all, we pay for the BBC in much the same compulsory and underhanded ways. And net zero has provided far better comedic value, especially in 2023.
Consider the latest news on smart meters – the innovation designed to help us save the planet by allowing us to manage our energy use. Unfortunately, they don’t work according to This is Money:
A Money Mail investigation found that many households with smart meters are experiencing problems with the devices.
These include some truly disturbing issues — for example, people being billed for energy used by properties hundreds of miles away, or meters going rogue, resulting in huge bills which customers then must fight to get cancelled.
Trying to fix the meters or challenge their tendencies to go haywire is, apparently, rather difficult too. Like most green energy innovations, smart meters have a habit of being paid for “going dumb” and then nobody wants to fix them.
Could smart meters be the next Horizon scandal? It had better join the waitlist of other similar bungles.
Electric vehicles (EVs) seem to be in much the same class of expensive mistakes, with their share of new car sales already declining and the price of used EVs outright crashing. It was an expensive mistake to make, even with all those subsidies the taxpayers helped with.
My favourite example of what we might call a “lightbulb moment” comes from the head of the world’s number one car company, Toyota. As summarised by the Telegraph, “Mr Toyoda argued that electric cars’ appeal is limited because one billion people in the world still live without electricity, while they are also expensive and need charging infrastructure to operate.”
Yes, the net zero zealots believe in rolling out EVs while many people still live without electricity, let alone green electricity… what could possibly go wrong?
My favourite example of net zero’s morbid humour has been the replacement of power-generating capacity with batteries to “power homes”… the Germans are considering replacing a nuclear power plant with Europe’s biggest battery, for example.
Did you know batteries can produce power? I didn’t!
But, according to Recharge News, the UK now has two new batteries “that can together power 450,000 homes.”
Impressive stuff, but the question is for how long…
Estimates vary, but 1 MW can power about 1,000 homes. Harmony Energy’s is the joint-largest battery energy storage system in Europe. It can provide 99 MW for two hours or 198 MWh of total discharge. So, it can provide enough power for 450,000 homes for about two hours at a stretch…
I don’t know about you, but a two-hour window seems a bit expensive at £75 million… and that’s just the storage – you’ve still got to produce the energy in the first place, get it to the battery and then move it to the homes. But only when they need it.
Siemens Energy’s CEO has a message for those claiming renewables are cheap. Here’s what he told The Telegraph: “The German boss of Britain’s biggest wind turbine maker has warned energy bills will have to keep rising to pay for the green transition as he attacked “fairytale” thinking about net zero.”
Fairytale!? And I was criticised for referencing the Children’s Crusade…
The Telegraph continues, “Joe Kaeser, chairman of Siemens Energy, suggested higher energy bills were inevitable as turbine makers grapple with huge losses, forcing them to pass on costs to their customers.”
And he should know. The business is such a nightmare that his company is considering a partial withdrawal from the industry, according to one German newspaper. We’re talking about one of the world’s largest wind energy companies here…
This bit of the interview with Kaeser caught my eye: “Every transformation comes at a cost and every transformation is painful. And that’s something which the energy industry and the public sector – governments – don’t really want to hear.”
What!? Governments don’t want to hear it!? That’s a bit different from what the wind energy companies have been telling us for years. We’ve been fed all sorts of details about how cheap renewables are – much cheaper than fossil fuels. Now, all of a sudden, they tell us that governments don’t want to hear that it’s going to be more expensive. Why not?
Wind is not the only one sputtering because “governments don’t want to hear” it. The Australian Financial Review newspaper exposed much the same sentiment about hydrogen:
‘The challenge with hydrogen, which governments around the world are realising, is that it is going to be more complicated and more expensive than traditional fuels,’ Ms O’Neill said of Germany’s H2Global initiative to run a double auction system for green hydrogen and derivatives.
More expensive than fossil fuels!? Governments are realising!? You mean they’ve committed us to a course of action without understanding what it would actually mean? They didn’t test and check what the costs would be and whether it would be viable or not.
Estimates for the cost of energy storage and transmission are spiking too, as we’ve covered in past editions. But let’s take a step back and look at the implications.
The whole net zero pitch is looking so implausible that I increasingly expect it to simply fade away altogether. Like so many past campaigns we simply gave up on because they were too difficult or too misguided, net zero will suddenly be bumped off the agenda by something like Russia’s invasion of Ukraine. Saving the planet from CO2 will no longer matter as much.
When we look back, it’ll be little more than an episode of hilarious boondoggles and slapstick reckonings. Only the price we paid for the entertainment will bother us.
The rules to purchase EVs, install smart meters, get rid of gas boilers and stoves… it could all be gone with the stroke of a pen. Or just delayed so often that it becomes meaningless and nobody buys into it anymore, literally.
This would explain the action in commodity markets – something that’s been bothering me. The green energy transition’s inputs are outright plunging in price. Especially the key battery ingredient: lithium. But also the likes of copper – a crucial part of electrification.
Can you imagine how commodity prices would react to the prospect of trillions in spending per year on energy infrastructure… if it seemed plausible that this would actually happen?
Instead, commodity prices seem to be deflating alongside renewable energy stocks. And, if you agree the two are related, that implies net zero just isn’t going to happen. At least it was funny while it lasted.
Exposing these sorts of mass delusions and what their consequences could be is a big part of what The Fleet Street Letter has been about since before World War II and appeasement policies.
Past editors covered the disastrous nature of the European exchange rate mechanism and how joining the euro would cause a boom-and-bust cycle in Ireland. The Fleet Street Letter warned about tech stocks and overvaluations.
I’m just happy to point out what should be obvious but which most people insist on learning the hard way.
To find out how you can profit from today’s delusions, check out The Fleet Street Letter here.
Until next time,
Nick Hubble
Editor, Fortune & Freedom
