Why Australia won’t become a “renewable energy export superpower”

In a joint media release with Victoria’s Minister for Climate Change and Energy (note the order of the words, which seems to reflect their order of importance to the state government) on 19 December, Chris Bowen, the federal Minister for Climate Change and Energy (note his identical title), formally declared that Gippsland’s coast on Bass Strait had become Australia’s first “offshore wind (power) zone.” The creation of this precinct, Bowen said, is “a crucial step towards affordable, reliable and secure energy and new economic opportunities for Australia.”

Assessing it charitably, Bowen’s assertion is highly questionable. Considering it dispassionately – and as he tacitly acknowledged on 22 February and I detail in this wire – it’s demonstrably untrue.

Even in the world’s leading wind power-generating nations, fossil fuels remain by far the most important source of energy. In these countries, wind power’s share of total energy consumption has risen from effectively 0% before 2000 to an average of just 12% in 2021. Clearly, wind isn’t powering these “world leading” nations; but if it can’t there, then where?

In particular, Denmark is the world’s leading generator of electricity from wind turbines. That’s because so-called “renewables” generate a majority – albeit most recently a much smaller majority – of its power. Yet it’s clearly not a renewable energy export superpower; moreover, its economy continues to rely upon fossil fuels.

Like Chris Bowen on 22 February, wind power’s enthusiasts occasionally and grudgingly concede the truth: it isn’t reliable because it requires “firming” from “base-load” sources – namely fossil fuels, hydro or nuclear power. In these “world-leading” nations, as in Australia, the domestic supply of base-load power has waned as the demand for power has waxed.

As a result, increasingly lacking domestic firming capacity, each of these “world’s best” adopters of wind power has become a net importer of electricity. As The Wall Street Journal (“The Ukraine War Lesson Europe Refuses to Learn,” 23 February) observed, “green energy is incompatible with energy security, which makes it incompatible with national or continental security.”

Denmark’s situation is particularly noteworthy. In the 1990s, it exported a considerable proportion of its output. But as wind’s share of its mix grew, exports ceased and imports commenced; over the past several years, Denmark has imported an average of 15% and as much as 19% of the power it consumes. It imports primarily from Norway and Sweden (Europe’s leading producers of hydro-electricity).

The situation isn’t merely ironic, it’s comical. Forget exports of intermittent power: without backup from imported hydro, which wind power’s advocates can’t abide, “world-leading” Denmark’s allegedly “sustainable” electricity grid – and thus its high standard of living – would collapse!

Finally, wind power is unsustainable because it’s always been and today remains uneconomic. It’s expanded not because consumers willingly buy it, but because the government compels retailers and subsidises generators to provide it. Without coercion and subsidies, suppliers would revert to economically and financially sustainable power.

Again, Denmark sets a poor example. Its power isn’t just the dearest in Europe; it’s the world’s most expensive. More generally, the latest data reconfirm a longstanding general relationship: the higher is the proportion of intermittent power in a country’s mix, the dearer is its price of electricity.

The implications for Australia are significant and potentially dire. Like Denmark over the past 15 years, so too Australia during the next several: as its share of wind power rises, it will face a deficit of power supply relative to demand. But unlike Denmark, Australia cannot import electricity.

Bluntly, the aspiration to become a “renewable energy export superpower” is laughable when Australia’s supply of electricity will struggle to meet overall demand – and adding insult to injury, is increasingly expensive and unreliable. Is Chris Bowen, a leading promoter of the unfolding debacle, destined to become the Minister for Blackouts and the Energy Crisis?

The World’s Leading Producers of Wind Power

Using data from ourworldindata.org, which it compiled from figures produced by the United Nations and World Bank, Figure 1 plots the percentages of electricity and total energy produced by wind turbines in the world’s leading wind-generating nations. My criterion for inclusion as “world leading” is: during a recent year, wind generated 20% or more of a nation’s power. By this standard, eight nations qualify. Denmark leads the pack: in 2020, wind generated a majority (57.7%) of its electricity. Lithuania, Uruguay and the Irish Republic generated substantial minorities (35-45%); and Portugal, Britain, Spain and Germany significant minorities (20-25%).

It’s vital to understand: presently, only one of the world’s developed nations derives a majority of its power from intermittent sources. Not coincidentally, all but two (Britain and Uruguay) of these eight “leading” nations are members of the European Union.

Figure 1: World’s Leading Producers of Wind Power (as Percentages of Electricity and Total Energy)

It’s also difficult to over-emphasise the fundamental and obvious point that wind is intermittent and unreliable. Not only does it (and hence its output of power) vary dramatically from hour to hour and day to day, and significantly from week to week and month to month: it also fluctuates materially from year to year. In 2020, wind farms produced 57.7% of Denmark’s electricity – but in 2021, the most recent year for which data are available, just 48.6%. In Germany and Lithuania, too, wind’s share of electricity was higher in 2019 than in 2020 and 2021.

During the past 15 or so years, significant decarbonisation of the electricity sector has occurred in these eight nations (Figure 2). Before the GFC, fossil fuels generated an average of two-thirds of their power; it then fell to 40% in 2020 – where, for the moment at least, it’s stabilised. Until the early-2000s, “total renewables” (including hydro) generated a constant 10% of power; since then, it’s vaulted five-fold to ca. 50% in 2020. Wind power, whose share increased from effectively 0% in the mid-1990s to 30% in 2020, has provided a disproportionate share of renewables’ rise in these countries.

Figure 2: Percentage Shares of Total Electricity Consumption, Eight-Nation Average, 1990-2021

Crucially, however, and as I’ve emphasised elsewhere (see in particular “Global Energy Transition” – Fact or Fiction? 6 February 2023), the consumption of electricity comprises a minority (just 17% globally in 2021) of the total usage of energy. Moreover, wind and other forms of intermittent power can to some extent decarbonise the household sector (including personal transport) – but not most of the agricultural, industrial and transport sectors. Consequently, only in Denmark during the past several years have wind farms produced more than 20% of the country’s total consumption of energy. The Irish Republic came close in 2020 (17%), but in Germany, Spain and the UK it’s just 10% and in Lithuania barely 5%.

In these “world leading” countries considered as a group, fossil fuels remain overwhelmingly the most important source of energy (Figure 3). Their share of the total energy mix has fallen from 88% in 1990 to 74% in 2021. Wind’s share has risen from effectively 0% before 2000 to 12% today. That’s modest decarbonisation, but hardly compelling evidence that wind can power these economies.

Figure 3: Percentage Shares of Total Energy Consumption, Eight-Nation Average, 1990-2021

“The World’s Leading Wind Power-Generating Nation”

In the 1970s, Denmark pioneered the development of wind power. “The home-market for wind turbines, combined with supportive policies and R&D support (in other words, lavish subsidies), has helped Denmark become a world leader in wind power technology” said Nordic Energy Research in 2012. In that year, Denmark’s government resolved to increase the country’s share of electricity produced from wind to 50% by 2020 and to 84% by 2035 (subsequently amended to a broader “100% renewable electricity by 2030” target). Today, a Danish multinational, Vestas, is the world’s largest manufacturer and installer of turbines.

Figure 4: Percentage Shares of Total Electricity Consumption, Denmark, 1985-2021

At first glance, Figure 4 will warm the hearts of wind power’s proponents. In 1985, fossil fuels in general and coal in particular generated virtually all of Denmark’s electricity. Beginning in the late-1990s, fossil fuels’ share began to wane and others’ (particularly wind’s) to wax: by 2020, wind turbines produced almost 60% of its power, renewables as a whole 80% and fossil fuels just 20%.

But upon closer inspection, Figure 4 should also furrow wind enthusiasts’ brows: for the first time in 20 years, in 2021 fossil fuels’ share of the power consumed in Denmark rose materially; simultaneously, renewables’ and wind power’s shares sagged – the latter by almost ten percentage points.

Denmark is a world leader of wind power, and renewables generate a majority of its electricity, but no matter: its economy nonetheless continues to rely upon fossil fuels (Figure 5). Summarising a complex situation, the world’s highest power prices (see below) have helped to expel a significant percentage of Denmark’s industry to other countries. But its agriculture sector is very large – indeed, is a big exporter – and fossil fuels rather than intermittent sources drive it.

Hence two crucial questions: if wind and other intermittent sources of electricity can’t propel “world-leading” Denmark’s economy, whose can they? And which does the Commonwealth Government value most: “decarbonisation” of electricity or “reshoring” of industry? These goals are antithetical.

Figure 5: Percentage Shares of Total Energy Consumption, Fossil Fuels and Renewables, Denmark, 1985-2021

Leading Consumers of Wind Power Depend upon Imported Base-load Power

Proponents of Australia’s “energy transition” assert that intermittent and particularly wind power’s share of power output will continue to rise. Indeed, for the next several years it’s more likely than not to occur (but probably won’t reach the government’s target; details below).

I hasten to add that the increased percentage of intermittent power in Australia’s mix will do nothing to alter the world’s climate – but much to intensify Australia’s existing energy and economic problems.

In these eight “world leading” nations as well as Australia, renewables’ share of electricity output have risen and fossil fuels’ have sagged, but the necessity of base-load power (whether coal- or gas-fired, nuclear or hydro-powered, etc., to “firm” the grid when the wind doesn’t blow enough or too strongly) hasn’t abated. In these “world-leading” wind power-generating nations, the domestic supply of base-load power has ebbed as the demand for imports was waxed.

As a result, each has become a net importer of power. Wind power, in other words, is unsustainable, and it’s unsustainable because it’s unreliable. Nowhere – including Denmark – can a wind-powered grid support itself; everywhere – especially in Denmark – it must rely upon base-load power, whether domestic or imported.

Figure 6 plots the percentage of Denmark’s consumption of electricity supplied by imports: numbers less than zero indicate that it exported power, and numbers greater than zero indicate that it imported it. During the early- and mid-1990s, it exported the equivalent to up to 40% (in 1996) of its domestic consumption. By the early years of the century, however, exports ceased and imports commenced; over the past decade, it’s imported approximately 13% of its power requirements. Before 2009, Demark exported the equivalent of 5.6% of its domestic power consumption; since then, it’s imported an average of 11.8% and as much as 19%.

Figure 6: Imports of Electricity as a Percentage of Total Demand, Denmark, 1990-2021

It’s true that correlation isn’t causation; yet where there’s smoke there’s often fire: as the percentage of wind power in Denmark’s electricity mix has risen, so too has the share of imported electricity (r = 0.63). Nobody’s ever called Denmark a “renewable energy export superpower.” That’s because it doesn’t export intermittent energy. Quite the contrary: it imports power – indeed, relies upon these imports – in the form of base-load (hydro and nuclear) power from Norway and Sweden.

For a decade, Denmark has been unable to manage without significant imports of electricity: in 2021, domestic production supplied 83% and imports 17% of total consumption. It’s imported power from countries where hydro generated most (e.g., 92% in Norway in 2021) power; “as a result,” says Wikipedia, “Denmark used hydroelectricity despite domestic production of it being close to zero.” Indeed, “part of the electricity consumed (3-4% according to older data) came from nuclear power, despite the country having no nuclear power stations.”

The Albanese government is tacitly but enthusiastically following Denmark’s lead. The implications for Australia are ominous:

Of the 16 countries that presently derive 90% or more of their electricity from low-carbon sources (Norway and Sweden are among them; Denmark isn’t), ALL rely upon hydro and/or nuclear energy; NONE have decarbonised using intermittent power. Yet Denmark is undeterred. So far, it hasn’t proved that decarbonisation is possible without rising reliance upon imports of base-load power – but it may be demonstrating that it’s not possible.

This result generalises. Figure 7 plots the average percentage of electricity in these eight “world leading” nations supplied by imports. Until 2008, they either exported power or met all of their needs from domestic sources. Since then, imports have met ever greater percentages of demand. Across these “world leading” producers of wind power, as wind’s share of the power mix has risen, so too has the country’s reliance upon imports – specifically, reliable, base-load power, whether hydro, fossil fuelled or nuclear.

Figure 7: Imports of Electricity as a Percentage of Domestic Demand, Eight-Nation Average, 1990-2021