Net-zero: distorted priorities

By Richard North - August 21, 2023

Out of left field comes an opinion piece in Wall Street Journal headed “Maui’s Fires and the Electric Grid”, which isn’t specifically about wildfires, despite the title.

It’s the sub-heading which really explains what it’s all about, telling us that: “Utilities are spending more on the green energy transition than on resilience”, making the point that, if you prioritise spending in one area, others may suffer from the diversion of resources.

I don’t want to get too embroiled in the detail as the paper entertains the idea the fallen power lines might have been a possible cause of the deadly fires in Maui.

Personally, I don’t think that was the case, as the anecdotal evidence points to a series of fires over the full day of Tuesday 8 August, but the fire that destroyed the town of Lahaina seems to have roared down off the mountain just before six in the evening, some 14 hours after fires were first detected.

In any event, there is some difficulty accepting that a source of ignition can be defined as the cause of a fire so extensive as the one that destroyed the Hawaiian town. At the very least, one has to accept that such fires are multi-factorial, the main cause being the presence of a highly combustible fuel load.

This notwithstanding, the WSJ points to the problems of PG&E, the California utility that filed for Chapter 11 bankruptcy in 2019 after getting sued for tens of billions of dollars for damages from fires caused by its equipment. The 2018 Camp Fire killed 84 people and razed the town of Paradise.

What both utilities have in common, the paper avers, is that they prioritised growing renewable power to meet government mandates over hardening their systems and reducing fire risk. In 2015, it says, Hawaii lawmakers required that 100 percent of the state’s electricity should come from renewable sources by 2045. California and some other states followed with similar mandates.

Hawaii’s mandate, we are told, was an especially tall order since only about 20 percent of its power in 2015 came from renewables. The islands lack large amounts of empty land to build solar and wind. They also lack natural-gas power that can ramp up quickly as backup. Most of Hawaii’s power had been derived from oil and coal.

This then brings us to the key issue. To meet the government mandate, Hawaiian Electric embarked on a rapid renewable build-out, which involved heavily subsidising rooftop solar and batteries and contracting for large-scale renewables at elevated prices.

Every dollar the utility spent on subsidising solar and connecting renewables to the grid, we are told, was one less dollar available for strengthening equipment and removing combustible brush. Despite rising fire risk from non-native grass, Hawaiian Electric spent less than $245,000 on wildfire projects on the island of Maui between 2019 and 2022.

Not until last year did the utility seek state approval to raise rates for wildfire-safety improvements, which it still hasn’t received. Former Maui County Energy Commissioner is quoted, saying: “Looking back with hindsight, the business opportunities were on the generation side, and the utility was going out for bid with all these big renewable-energy projects”.

What makes these such important observations are that, in a different context, they apply with equal force to the UK (and probably many other countries as well).

Join together resilience and security of supply and it is self-evident that, in this country, the push for renewables and the demonisation of fossil fuels has dangerously weakened the supply situation, to the extent that significant power outages over the next few years are almost certain.

But it isn’t just our electricity supply that is threatened by this distortion of priorities. As Ed Conway points out in a Sunday Times article that I should have scrutinised more closely yesterday, our food security is also being damaged.

He refers to the permanent closure announced in July of the Haber-Bosch ammonia plant at Billingham, used to provide the feedstock to make ammonium nitrate fertilizer and nitric acid.

This is the only plant of its type in the UK and while the controlling company, the American-owned CF Fertilisers UK Limited, intends to maintain production of these chemicals using imported ammonia.

The plant had been mothballed for a while, a direct result of the increase in prices of natural gas, used to provide the hydrogen to drive the Haber-Bosch process.

This is a reminder, says Conway, that in an era when many countries are investing more in manufacturing and thinking harder about where they get stuff from, Britain is still deindustrialising, becoming more reliant on imports from overseas, more exposed if things suddenly run short.

With similar shutdowns taking place in Europe, and particularly Germany, the great paradox is that in some respects this suits European politicians perfectly fine. Less steel, fertiliser, aluminium and paper manufacture means less carbon emitted and a faster path to net-zero. Europe can just import all this stuff at lower prices, say the economic textbooks.

But, Conway warns, economic models make no allowance for breakdowns of supply chains or for outbreaks of war. Even as we career towards a new, more uncertain age, we are leaving ourselves more exposed than ever before.

NFU Deputy President Tom Bradshaw was unequivocal in his response. “This decision is a concerning one and exposes our fertiliser market further to global volatility”, he said, pointing out that: “Availability of fertiliser is a crucial element of domestic food security and relying on importing ammonia from global markets exposes British fertiliser production to possible long-term risks”.

What may come as a surprise, Conway claims, it that news of the closure hasn’t appeared in a single national newspaper report. I’ve checked this for myself and nowhere in the national media can I find an explicit report on the closure of the plant.

Where it is mentioned, even by the august Financial Times it is in reference to the production of the CO2 by-product and the impact on the food industry.

Thus, the Ed Conway commentary seems to be the first substantive report in the national media on the loss of a major strategic facility. This does rather underline the general vacuity of the media, and its inability to report important news, while concentrating on trivia.

What it also represents, though, is the lack of focus on the consequences of pursuing net-zero, where the media is full of reports of the perils of “global boiling”, but less concerned to spell out what conceding energy policy to the zealots means in practice.

But what applies on a macro-economic scale, also impacts on domestic spending. If, eventually, households are forced to change to ruinously expensive and inefficient heat pumps, and replace their ICE cars with over-priced EVs, disposable income must fall, with inevitable effects on the larger economy.

Strangely enough, contradicting the reassuring polls that supposedly prove public support for net-zero, we see Starmer being warned that “Voters won’t accept ‘economic destruction’ to reach net zero”.

This comes from Gary Smith, the general secretary of the GMB union, who is telling the Labour leader that the rush by his party to abandon oil and gas would be “a disaster”, as he argues for Starmer to rethink his green objectives.

On the face of it, it would seem that the public at large is more aware of the downside of net-zero than are the politicians, the cultists and their fellow travellers, and are not impressed by Starmer’s plans to place its decarbonisation agenda at the heart of its offering at the next election, with its multi-billion pound “Green Prosperity Plan”.

But then, being simple souls, ordinary people are perhaps more aware of an inescapable economic fact – that you can’t spend the same money twice.

If Starmer – and Sunak, for that matter – are away with the fayries, pouring money down the sink hole of net-zero, it must mean that there is less money available for more important things, like keeping the lights on.

All in all, this is truly a matter of priorities. The nation cannot afford the venture into la-la land that is net-zero territory, and the politicians need to realise that there are more important priorities to hand.