The usual suspects continue to hype the usual green technologies in the usual way. But from Australia we learn that “Billionaires’ spat brings down $30bn Sun Cable”. A dispute between the two main backers of a giant green energy project “has led to the implosion of the country’s largest renewable projects which is now in administration.” Oh dear. And here we were promised it was such a great opportunity investors would be rushing to get a piece of it.
The story says “A fall out between two of the nation’s richest men has led to the abrupt implosion of the $30bn Sun Cable project, one of the world’s biggest solar and battery projects which had aimed to turbocharge Australia into a major international clean energy exporter.” And note that it wasn’t actually turbocharging Australia into a major international clean energy exporter, a phrase that logical positivist philosophers might suspect of being grammatically proper and superficially impressive but literally meaningless rather than factually false. But for all the hype, whatever it was collapsed with remarkable suddenness.
The same is true of such technology around the world, which might be trying to tell us something. Hardly a day goes by without some story like “Electric vehicles keep defying almost everyone’s predictions” (the email teaser subject line) from David Wallace-Wells, who insists that:
“there are almost three times as many E.V.s on the world’s roads now as there were when Covid vaccines were first approved, and what looked not that long ago like a climate pipe dream is now undeniably underway: a genuine transition away from fossil-fueled transportation.”
Chinese domestic and export sales are booming, he says. Because of a government plan we hasten to add. To be fair, EVs seem to be catching on in Norway and in Germany. And, he adds:
“This is not just eye-popping growth, it is also dramatically faster than most analysts were projecting just a few years ago. In 2020, the International Energy Agency projected that the global share of electric vehicle sales would not top 10 percent before 2030. It appears we’ve already crossed that bar eight years early, and BloombergNEF now projects that the market share of E.V.s will approach 40 percent by the end of the decade…. The underlying production capacity is perhaps even more encouraging. In the United States, investments in battery manufacturing reached a record $73 billion last year — three times as much as the previous record, set the year before. Globally, battery manufacturing capacity grew almost 40 percent last year, and is projected to grow fivefold by just 2025. By that year, lithium mining is expected to be triple what it was in 2021.”
But how much of it, including the sales, is propped up by subsidies? It’s hard to know whether to call it success or failure that in Canada:
“A federal program to pay $5,000 rebates to electric car buyers went more than 150 percent over budget, say auditors. Rebates cost taxpayer more than three quarters of a billion and were ‘an ongoing concern.’”
If you’re trying to give away money to get people to do something, going over budget means even greater uptake that you hoped for, which is good. But would they buy them without the free money? And how will they feel when they discover that, by his government’s own calculations, Canada’s EV mandate is going to cost citizens at least $99 billion while, apparently, secretly making them all richer.
Wallace-Wells concedes that “while the ‘flows’ are indeed impressive, the ‘stock’ of E.V.s on the road is probably only 2 percent of the global fleet, which still isn’t close to 100 percent at all.” Which wouldn’t be as big a problem if there were not some real question whether those who buy subsidized EVs will soon regret the choice.
As Toyota’s CEO seems to think they will, claiming not only that “BEVs” will take much longer to become mainstream than media hype suggests, but that a “silent majority” within the industry knows it. It’s a particular problem that they don’t work well in cold weather; as the Wall St. Journal pointedly asked, “Imagine if the 100 million Americans who took to the road over the holidays were driving electric cars. How many would have been stranded as temperatures plunged?”
Other rumblings are also being heard, for instance from Britons who “just faced a nightmare Christmas journey” due to cold weather and charging problems. Buyer remorse is especially likely if, as people like the Manhattan Contrarian keep insisting, the whole thing will founder because you cannot possibly expand the electric grid, generation, storage or transmission, sufficiently to power all these clean, green, quiet pods of the future politicians dreamily imagine shuttling the Jetsons about in the cities and countrysides of the future.
It doesn’t help that a firm called Britishvolt also just collapsed into “administration”, prompting warnings that “Britishvolt’s failure means the UK risks missing out on the global EV boom” just because they’re not profitable. Bloomberg comments that “Former Prime Minister Boris Johnson had hailed the company as a centerpiece of his ambitions for a ‘green industrial revolution.’” And the BBC said “Ministers had hailed it as a ‘levelling up’ opportunity that would boost the region's economy and support the future of UK car making. But Britishvolt struggled to turn a profit and ran out of money.”
“In January 2022 Boris Johnson hailed the ‘EV battery pioneer’ for planning to create ‘thousands of jobs’. Less than a year later, Johnson is out of Downing Street, Britishvolt is bankrupt, and the future of the UK car industry is under serious threat.”
But it hoped a firm from Communist China would come to the rescue with “a ‘gigafactory’ in Sunderland, with 38 gigawatt hours (GWh) of annual output to supply the Japanese carmaker Nissan next door.”
Undaunted, the Australian government continues to pour subsidies into anything greenie including hydrogen, and warn companies to do the same, with rhetoric like:
“The reason why we're doing hydrogen hubs around Australia is that the growth and potential of this industry isn't a niche industry. This is something that will make an enormous difference to Australia's economy.”
But it is fair to ask “How would you know?” Especially since Australia’s prime minister was just caught trying to hide the fact that one coal plant alone will be given a subsidy of nearly half a billion dollars to compensate it for losses from a one-year cap on coal prices, thus lowering energy costs with one hand, pushing them back up with the other, and hiding the real price of its ludicrous energy policy from consumers, voters and possibly themselves as well. (The fact that caps on gas prices are also creating unanticipated shortages in that country suggests that if they’re going to subsidize anything, economics textbooks for politicians would be a wise choice.)
It’s also fair to warn that if it all does collapse, far from generating a dazzling array of clean, well-paid, prestigious and inspiring jobs of the future, it will take vast amounts of private investment capital with it while leaving a huge pool of government debt, leaving us all poorer and less resilient. Which could matter.