Working On The Cost Predictions Of Green Tech

Posted: Dec 20 2013, 10:46am CST | by


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One of the stranger assertions we’ve had over the years about climate change and green tech over here in the UK is that said green tech will in fact reduce the amount we all pay for energy. Which is really rather difficult when you come to think about it as each and every green tech method of generating energy is more expensive than just dousing something in more fossil fuels.

There are, objectively, several ways you could get to this it will all be cheaper argument. One could be that the costs of climate change will be so horrendous that it will indeed be cheaper to switch. But that’s not the argument that was being made. We could also argue that green tech is going to get a lot cheaper but that’s also not the argument that is made by the British Government. No, instead, they argue that fossil fuels are going to get a lot more expensive in the near future:

By about 2020 it was assumed that expensive technologies such as wind farms and solar panels would be competitive against what would by then be much more expensive fossil fuels. Add in a bit of energy efficiency, and ministers could confidently predict that household energy bills would be 8 per cent lower by 2020 than they would have without their policies.

Almost everything that could be wrong with this is in fact wrong, and it explains the mess that British energy policy has got itself into. There is no shortage of oil, gas or coal. We are not running out of any of them. There is enough to fry the planet many times over. There is no reason to assume that oil and gas prices will go on ever upwards, and it is at least possible that they will fall, joining the sharp fall in world coal prices. If so, renewables are unlikely to become cost-competitive by 2020. The subsidies will not then wither away. They would be permanent. Therefore, bills would be higher than they would have been as a result of government policies, not lower as Mr Davey claims.

Well quite: and we’ve just seen what fracking can do to the price of natural gas but said Ed Davey still goes on insisting that the price of gas is only going to go up from here. Indeed, he won’t even admit that the low price of natural gas in the US has displaced coal from that country, making coal cheaper here in Europe.

We’ve thus got the worst of all worlds here. The government’s entire plan about energy supply depends upon the idea that fossil fuel prices are going to rise sharply in the future. So therefore we have to spend all this money on subsidising the renewables and green tech. Plus, in order to make sure that fossil fuels, especially natural gas, do rise in the near future we’ve got parts of the government at least being as obstructive as possible in getting fracking approved for fear that it will show their plans to be wrong. And they’re being quite forceful about it too. At one point Davey was insisting that fracking must stop if there was an earthquake of 0.5 magnitude. This is roughly equivalent to dropping a bowling ball from head height onto a lawn.

It’s not really the way you’d be wanting anyone to run a country.

Source: Forbes

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