A Free-Market Energy Blog

Towards Sound Energy Policy (Part I – Current Flaws)

By Kent Hawkins -- January 16, 2013

For well-being, present and future, including overall governance, health and medical care, financial, economic, human rights, equality, peace, security and liberty, etc.,[1] we have to stop playing political games with energy policy in the developed countries in the West and turn to sound approaches.

In particular, Europe must withdraw from its desperate and destructive attempts at regaining some measure of world ‘leadership’, which it deservedly lost in the 20th century as a result of succumbing to dangerous extremist policies in many areas, including political, social, judicial, economic, military and international matters.

Europe’s “leadership” conceit includes questionable, radical energy policies, particularly in electricity systems, to “de-carbonize” the world with “new” (really ancient) renewables. This futility is wasting resources on a grand scale as is now beginning to be realized (here and here).

Unfortunately this may be a case of too little too late unless we act now to get off this lemming-style dash to catastrophe, energy being the master resource. We face more than one such ‘cliff’ today, and any that can be avoided must be.

This cannot be stated too strongly. It is not an argument from a special interest point of view or in support of any specific economic theory, not to say that any of these is necessarily invalid. It is from the perspective of what is best for mankind, and based on the work of internationally respected energy experts.[2] I repeat a disclosure statement which I have stated before.[3]

The case for the current flawed energy policies (primarily focussed on electricity) in the West is based on issues surrounding climate change, 21st century industrial development (jobs), fossil fuel and nuclear concerns, and energy independence/security. The following is a necessarily brief overview of very complex matters, but should serve to provide an instructive, broad context.

Part I today addresses the drivers and flaws of current energy policies in many developed Western countries. Part II tomorrow deals with sensible approaches, which are quite evident, but apparently politically impossible within most Western democracies.

Climate Change

Possible futures facing us include: anthropogenic global warming (AGW, that is human caused), non-A GW (not human caused), and non-GW (global cooling). There are other potential challenges including pandemic, economic/financial collapse, world war over resources, famine and unexpected, unwanted surprise events, any one of which could have similarly catastrophic effects.

Long-term forecasting, based on significant uncertainty in our understanding of the complex ecosystem, and producing an ‘expected’ outcome, is not a rational process as the foundation for energy policy. I see no sensible alternative but to put equal probability on all outcomes, ignoring at this level of analysis, for example, that AGW may turn out to be anything from the case where adaption is possible to extreme consequences.

We cannot ignore the risk of AGW, but it should not be allowed to cloud our understanding of the total situation that we face and the determination of the optimal approach to best position us to meet any challenge/threat, known and unknown.

Renewable Energies

Those addressed here include hydro, and the ‘new’ renewables, wind and solar. There are others, but of less immediate interest. The ‘new’ renewables are claimed to be the ‘silver bullet’ solution to all the issues raised in the first section above. They are not.

As will be further discussed in Part II, time periods are an important consideration. All renewables have three categories of technologies employed: old, current, and future, with some overlapping. In varying degrees, these are all old energy sources that we naturally turn to in early stages of our development of harnessing energy for our use.

To illustrate this, when the percentage use of hydro for electricity generation by country is ranked, 38 of the top 41 countries are in African, Central and Southeast Asia, and Latin and South American. There are only three developed countries – Norway, New Zealand and Austria, largely due to their topography. In absolute terms, China is by far the leader, at more than double the next largest, the U.S.

One of the problems with hydro is the land area required for reservoirs. This takes 60% of the total land requirements for all electrical energy considerations including fuel extraction, refineries, transportation (including pipelines), generation plants and transmission lines.

It is one of the major drawbacks of old and the currently popular renewables that renders them not scalable to the levels required to have an impact on the issues we face, even ignoring all their other shortcomings. Thus none, including hydro, is a candidate to replace fossil fuel or nuclear plants.

Wind is often presented as a new technology needing support for its further development to overcome cost disadvantages compared to fossil fuels for example. This basic mechanical energy capture technology is centuries old and has little opportunity for improvement, except to increase the size and height of the rotor. You can safely ignore schemes to put wind turbines in our oceans or fly them in our skies. They simply should not be any further part of the discussion, except as described here.

Within the group of hydro, solar and wind current renewables, only direct conversion to electricity by solar has potential for technology development. The power density[iv] of solar flux impinging on the earth’s surface is in the order of 102 watts/m2, which is in the upper range of today’s hydro-electric plants. At this total level of energy flux available, solar is about 100 times greater than wind. Solar’s total available power density is also in the upper range of the requirements of our cities, but only at the lower range of heavy industries.

Here we are talking about annual energy flux, ignoring peak levels for both sources and uses, and 24-hour-per-day availability. This means that reliable electricity generation technologies with higher power densities must be present at levels to meet the full spectrum of the demands of modern societies regardless of time of day or season, including growth, old plant retirement and backup needs. Notably the upper range of power density in industrial energy use is at the lower range for that of thermal power plants.

Today PV solar has a power density of less than 10 W/ m2, which is about 10% of the total available solar flux. Wind turbines provide less than one-fifth of that for solar, in part because of the limitation of Betz’ Law. With solar there is room for notable improvement given the possibility of technology advancement to do this. This is not an argument for the commercialization of existing PV technology, but for R&D support for future solar technologies.

Not differentiating between current and potential future renewable technologies is a fundamental error in thinking about new renewables today, and as already indicated, not all renewables have the same potential. At this point , it is reasonable to say that future solar (thinking in terms of the last half of this century for commercialization) could likely be an important adjunct to other more power and energy dense or intense sources. Pleasant surprises are also a possibility.

Solar would also be relevant to future grid architecture, which will likely incorporate distributed generation, misleadingly thought of today as the ‘smart grid’. Any hasty implementation of such is far from smart, as previously discussed here and here. It must be remembered that distributed generation includes only facilities that are intended to meet local demand and not to feed the grid for distant consumption.

Unfortunately for us all, many have invested considerable political and other forms of capital in the support of a major push for new renewables. These sources fail to be part of any feasible approach in the foreseeable future to deal with the issues of climate change, sustainable industrial/economic development, fossil fuel or nuclear energy use, or anything else for that matter. The recent extension of the Production Tax Credit is a sad testament to such folly.

Emissions Trading/Carbon Caps, Carbon Tax

These represent approaches to address climate change concerns through government and international agreement measures, which inherently involve politicians and bureaucrats with insufficient knowledge and questionable motives making important decisions. Through two decades and a number of summit conferences, the top-down Kyoto international agreement approach involving carbon caps has been ineffective. The European emissions trading system (EU ETS) is a generally acknowledged failure as an effective scheme for emissions reduction.

A carbon tax is another approach now being considered, but the conventional view based on production is a flawed one, which typically results in carbon leakage. The way this plays out, as it has in Europe, is the taxed jurisdiction will tend to de-industrialize because of higher costs and import less expensive products from another jurisdiction with a high carbon footprint. The overall effect of global carbon reduction (the only way to look at it) is thwarted. The commonly quoted and used production-based carbon footprint per capita measure by country is not sensible, and should be ignored.

In theory, changing this to a consumption tax by determining the carbon inputs by product is more relevant. Imports are handled by imposing a border tax, which is credited with any product content tax imposed by the exporting country. This allows unilateral initiatives without the carbon leakage disadvantages of the production tax. Exporting countries then have the option of implementing their own versions to capture the revenue. Emissions per capita now becomes more reasonable a measure, but still must be considered within the context of overall emissions by country.

One of the major problems with this is its complexity because it is a much more difficult to determine the carbon content by product than by general production process. There are approaches to address some of this, such as those proposed by Helm,[v] but all considered a carbon tax is complex, subject to considerable political and bureaucratic mismanagement and likely will produce many unintended consequences.

It seems to me that any carbon tax initiatives should not be implemented prematurely, if at all.

Energy Efficiency and Conservation

For the sake of simplicity, matters surrounding energy efficiency and conservation have not been addressed. If these are counted on and planned targets are not met, we may face a serious energy shortfall.

The necessary initiatives for these, along with such other matters as the truly necessary grid improvements for example, should flow naturally from an umbrella of a sensible energy policy described below. Market signals, not top-down planning, can “plan” even a market of the uniqueness of electricity, where supply must be instantaneously consumed given the costliness of storage.

I would also caution to differentiate between market conservation in the face of price signals and government conservationism where the public policy assumption is that energy usage in not good per se. The latter assumes that planners know more than individuals and is based often on physical waste rather than economic waste.


The current path we are set on in many of the developed Western countries is not in our best interests in the short to medium term of approximately the next 40 years. Part II will show sensible and necessary approaches for this time period.


[1] I would normally avoid the use of ‘etc.’ , but it is used deliberately to indicate an almost endless list of matters, intricately bound with, and dependent upon, abundant, reliable, high-quality energy availability.

[2] I have been influenced by the following, who many deem to be among the most knowledgeable on energy matters. It should be added that you do not have to agree with everything anyone says to gain from their knowledge.

(a) Vaclav Smil is not easily categorized. The following comments are taken from Wikipedia, which has done a reasonable job of this.

Smil’s interdisciplinary research interests encompass a broad area of energy, environmental, food, population, economic, historical and public policy studies. He has been an invited speaker in more than 250 conferences and workshops in the USA, Canada, Europe, Asia and Africa, has lectured at many universities in North America, Europe and East Asia and has worked as a consultant for many US, European Union and international institutions. In 2010, he was named by Foreign Policy magazine to its list of top global thinkers.

(b) Deter Helm (from the jacket of his recent book, The Carbon Crunch, Yale University Press) is professor of energy policy, University of Oxford and Fellow in Economics at New College, Oxford. He is a member of the Economic Advisory Committee to the UK Secretary of State for Energy and Climate Change, and Chair of the Natural Capital Committee. In 2011 he was Special Advisor to the European Energy Commissioner.

(c) David MacKay is the professor of natural philosophy in the department of Physics at the University of Cambridge and for the past three years has been the chief scientific adviser to the UK Department of Energy and Climate Change. It has been reported that he is bringing a reasoned, scientific approach to UK energy policy, and if recent events are any indication, he appears to be succeeding. He is also noted for his book on rational approaches to energy policy, Sustainable Energy: without the hot air, which has to be interpreted very carefully.

[3] In the interests of full disclosure, I have not owned (to the best of my recollection and possibly through mutual funds at some distant time), do not now own, or plan to own, investment instruments in the energy sector. My only investments, outside of Canadian government guaranteed cash equivalent securities, is a small holding in gold stocks. I subscribe to an energy investment newsletter as another “window” on energy considerations. I have not received one cent for these posts from anyone, and I am not beholden to anyone who might benefit from them, except to the society in which I live, which I want to protect for the benefit of my grandchildren and their descendents.

[iv] For the definition of this, and related concepts, I rely on Smil’s views in his book, Energy in Nature and Society, and much of what follows are direct quotes. Power density (W/m2) is perhaps the most revealing measure of the ability of energy sources to meet requirements. In part, power density is a measure of the land area required to meet the energy flux requirements.

It also has a power component (W, and W = m2 x W/m2), which is the measure (and means) of providing energy flow, or flux (W = J/s). Modern societies, and their associated complexities, are not possible without reliable, high energy flux with power densities much higher than average needs to meet peak, plant retirement and growth requirements.

Diffuse energy sources (hydro, wind and solar) have low power densities, and coupled with low, average power capabilities, are inadequate to meet our needs regardless of their total, diffuse energy content. Further, due to the stochastic nature of their availability (in varying nature and degrees), they also lack the necessary reliability.

Energy density, measured by volume, in J/m3 (not area), or weight, J/kg, is another factor, and its relevance is more easily understood. It is decisive for all portable applications or where space and weight are at a premium. Energy concentration (J/m2) reveals the spatial density of resources, a critical measure of extraction or harnessing methods and costs and associated infrastructure needs.

[v] See note 2, chapter 9.


  1. Ronald Walter  

    Wind power is disliked, strike that, hated. It destroys the landscape, land values decrease, it is a high cost for a short term, minute return.

    The wind towers are not people friendly. A chimera if there ever was one. You will never convince the wind power fascists.

    “We had to destroy the village in order to save the village”


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