Over the past decade, Gordon Hughes, a professor of economics at University of Edinburgh in Scotland has been studying the costs and performance of wind energy. Hughes, who spent much of his career working on energy access issues at the World Bank, explains why the capital and maintenance costs of offshore wind energy projects are increasing, why the promise of “green” jobs has “never been realized anywhere,” how land-use conflicts are halting the expansion of renewables in Europe, and why it is “profoundly dangerous” to believe we can run the world economy solely on renewables.
Robert Bryce 0:04
Hi, and welcome to the power hungry Podcast. I’m Robert Bryce. On this podcast we talk about energy, power, innovation and politics. And we’re going to get a lot about power and politics today with my guest, Dr. Gordon Hughes, who is a professor of economics at the University of Edinburgh. Gordon, welcome to the power hungry podcast.
Unknown Speaker 0:23
Welcome. It’s pleasure to join you.
Robert Bryce 0:25
Now, I warned you, Gordon, I asked my guests to introduce themselves. So you have a long CV, you’ve been in academic life and doing a lot of things for a long time. Imagine you’ve just arrived somewhere don’t know when anyone you have 45 seconds go.
Gordon Hughes 0:40
I started out life as an academic. I’m an economist by discipline. But I’m stacked statistician by much of my practice. But after about 20 years, as a straightforward academic, I became more interested in the issues of policy and actually doing things in practice. And so I joined the World Bank in Washington, DC, to act as a policy advisor, which I did for 10 years. And then I did for a further period of time as an outside consultant. And then eventually, I finished up as the chairman of a regulator in the United Kingdom. And at the same time, I have become a specialist in wireless internet services, since I ran a couple of wireless Internet service providers. So I’m, this is important in the context, what we’re going to talk about, because by background, I may be an economist, by inclination, I’m as much an engineer, as an economist, I’m interested in nuts and bolts of how things actually work. And that’s added to a long range of experience across a range of infrastructure, including electricity, but also water and gas and telecoms and the like,
Robert Bryce 2:01
Well, okay, good, you covered the waterfront far better than I might have. So that’s great. But today, we’re going to talk about offshore wind. And this has been an area that I know that you’ve been studying for, what more than a decade now. So if you don’t mind what’s happening with the wind energy business in Britain today. And in the rest of Europe, this has been very much in the headlines around wind, droughts, and so on. But this is where you focused on the economics of wind, what’s going on now.
Unknown Speaker 2:28
The the UK Government and many other governments in Europe have set very ambitious targets for increasing the total amount of wind power, particularly focusing on offshore wind. In the UK, we have about 10 gigawatts of offshore wind at the moment. And the target is to increase that to something like 40 gigawatts over the next 10 years. So it’s a very big increase. And similar programs are underway in many other parts of Europe. Not all of this is based on an assumption that the costs of offshore wind are falling very radically, because up to now, offshore wind does seem to be rather expensive, nearly two or three times the market price of electricity, and therefore it’s hard to justify such labs spending. So the big question that is really at the heart of much of the debate about wind power, is whether the costs really are falling in the way that the advocates for wind power are arguing. And
Robert Bryce 3:46
this is, and this is where you concentrated and what’s the short answer here are the are the costs of wind power falling, in particular on offshore?
Unknown Speaker 3:54
That the short answer is that I believe not. But many people believe I’m fundamentally wrong. And I think I need to provide a little bit of background to understand that. And the first piece of background is that there has been a long history of failures to realize ambitious projects, particularly when they rely on falling costs. And I’d like to give a brief example, in Britain, we have a high speed railway being built. We were told when it was planned that it would cost about 30 billion pounds to build. The current cost estimates for building it are over 100 billion pounds. And the realized cost is likely to run anything from 25% 50% More than that.
Robert Bryce 4:48
So let me ask that question. Are costs actually falling then when it comes to wind energy in Britain in the rest of Europe?
Unknown Speaker 4:56
I don’t believe so. But on the other hand, there are a lot of people Who are absolutely firmly convinced that there have fallen and are continuing to fall. And there’s two factors that lie behind these kinds of expectations. The first is that there is a long history of people being over optimistic about new technology. And I would like to give the example of a high speed railway system that’s been built in the United Kingdom, where the original costs were said to be around 30 billion pounds, the current costs are of the order of 100 billion pounds, and it’s nowhere near complete. So the reality is that the costs are going to be anything from three to five times what was originally thought. And that’s a phenomenon that’s known as optimism bias, in other words, where the proponents of a policy or a project, vastly underestimate the costs or overstate the benefits. And the people who believe that costs are falling are clearly potentially victims of that kind of bias. The second element is that the people who believe that costs a folly, use a rather artificial measure known as levelized costs. This is constructed measure of costs, which spreads the capital costs over time, but is artificial, because it relies on a set of assumptions that are never realized in practice. And people claim that the the levelized costs for being falling, because two things that lie outside what we think of as costs, number one, they’ve been assuming that the life of wind farms will actually get longer. Historically, very few wind farms have operated for more than 20 years. Now, they assume that they’ll operate for 30 or 35 years, I find that hard to believe. But on the other hand, all of the cost estimates rely on that kind of assumption. The second
Robert Bryce 7:06
bit of getting rubbed, because I think you’re on something interesting. And in looking at some of your reports, your what you’ve said over and over is that the actual lifespan of these wind projects is likely 15 years maybe no more. Right? Correct. And further, one of the things that just to me intuitively seems wrong about this idea of a 35 year lifespan is that you putting these these massive machines out there in salt water, which is so what is just terrible for everything, right? I mean, it just degrades everything. So so if I can repeat what you said, you’re saying that these cost assumptions are based on unrealistic timelines, and they’re based on it further in terms of the longevity of the project. And further, they’re based on this idea that the costs are going to continue, because they’re going to get better at doing it right somehow that there’s going to be a learning rate that’s going to going to apply is that a fair summary?
Unknown Speaker 7:54
Yes, that’s a fair summary. And anybody who has any knowledge of the offshore oil and gas industry is likely to be very skeptical about that. Because what we have learned is that the marine environment is incredibly high, harsh. And lifespans really very short unless you spend vast amounts of money on essentially protecting the equipment concerned. But there’s a further element in that story as well, which is over the last 10 years, interest rates, as we all know, have fallen and have stayed low. That affects the cost of capital for new projects, but they’re not going to get any lower there as low as they are ever going to be. And if they were to rise, the cost of capital for what a very capital intensive forms of generation is going to get higher, not lower. So the kind of factors that may have underpinned a one soft fall are being translated as being reasons why the costs are going to continue to fall in future, whereas neither of those two factors will apply. But if we look at what we what we actually can see, because the other element of this is, well, technology is going to solve all problems. In other words, there’s going to be a technological revolution, and the machines are going to get bigger or better or more reliable. The practicality for offshore wind is that over a period of the last 20 years, the capital costs of building new wind farms have increased. They’ve gone up by about double. And that reason for that is that they’ve moved to deeper offshore sites, which are more expensive to develop and more expensive to operate and maintain. And a
Robert Bryce 9:50
grenade wrapped right there for one second, because that’s one of the things that I wanted to put on my I will I’ve written on my list of questions, because here in the US, I mean, we have a very I mean that you industry has been, you know, trying to get started now for more than a decade, right 2011 Secretary of Interior, Salazar at that point said by by 2020, we’ll have 10,000 megawatts of installed offshore capacity today we have 30. So the point 9970 megawatts short of the goal that was set 11 years ago. But my point, my question here is that the the resistance to offshore wind has largely been from people on the beach of you know, own home saying we don’t want to see these turbines in on the horizon. And so the regulators have said, well, we’ll move them further offshore. Well, the Is it true, then the further you move them offshore? Is it axiomatic that the costs go up as they the further offshore you go?
Unknown Speaker 10:39
Yes, it’s that that is almost necessarily the case for two reasons. One, because the sea depths get greater. And you can’t build fixed foundation turbines in more than roughly 50 or 60 meters of water depths, but they get even very much more expensive, as you go from 10 meters to 15 meters. And the second thing is the cables that are required to run from the wind farm to the shore, become longer, they have to wear, they have more movement, they have more problems, and they’re less reliable. So we’ll go into
Robert Bryce 11:18
and that’s an issue that’s already been discovered in Rhode Island with some of these, the the transmission cable from the only wind farm, we have the Block Island Project, it’s only been in operation a couple of years, and already that cables have been exposed, they’re having to redo the cabling to bring the you know, to bring that power ashore. I mean, it seems like just that one issue already has been proven to be very problematic.
Unknown Speaker 11:39
Indeed it has. And it’s consistently around the world, particularly in Britain and Europe, which is that the cables for new wind farms are the most important source of unreliability of outages, we have a number of wind farms where they have lost months of operation, because they were cable failures. And gradually, it’s also being recognized even if they’re not one soft cable faders. They move around, because then moved by the tides and by the waves, and they were against the rocks on the bed of the sea. And the result is that they have to be replaced. And so what we’re thought of as being, you know, once off large investments at the beginning of the life actually turn out to be things that you’re having to redo after five 810 years in terms of that.
Robert Bryce 12:37
Well, it’s interesting that you say that, because one of the few years ago, I was in Montauk on Long Island in the US here and talking to fishermen. And one of the things that became obvious and just talking with them a little bit was that the ocean floor is actually rather crowded that when it comes to you know, there’s I’ve called it the open the vacant land myth, right. And this is one of the things about renewable energy in the US. So we’ll just put it out there, you know, in flyover country, but the same thing seems to apply when it comes to the ocean, that there’s this vacant ocean myth, and that there’s Oh, there’s a lot of open, vacant ocean. But in showing me some of these maps, these fishermen were saying, well, here’s an area with this is unexploded ordnance. And here’s a shipwreck and here are these other things. And you know, is that is that is that accurate, that there’s this vacant ocean myth is at work here as well.
Unknown Speaker 13:22
Especially when we’re talking about coastal regions, because coastal regions are where the accidents occur, whether that’s shallower, and therefore there’s more junk around. And there’s an element of nother part of my life, which is in Internet services. There are cables all over the world, which support our conversation and all of the Internet services. And those get regularly cut by anchors that drag Forsch boats for other accidents that happen that all the time at risk. And the idea that many, many cables. I mean, there were pipelines, where you spent a lot of money to install a gas pipeline and Orion pipeline, but there are not a lot of them. But once you’re starting building lots and lots of wind farms, there are going to be hundreds or 1000s of these cables running from somewhere in the North Sea to the coast of Britain. And yes, they will run aground rocks and wrecks, and all kinds of other stuff. So and they will wear for these reasons.
Robert Bryce 14:33
Well, it’s interesting. You mentioned that fiber optic cables, because I know Google has been one of the ones very aggressive and building transoceanic fiber optic cables connecting continents all over the world, right. But this is I didn’t think about it in those terms that that’s really one cable going point to point but you’re saying you put an array of wind turbines they all have to be connected to each other and then to come ashore, which I hadn’t really thought about before. But yeah, you’ve got to have that that conductivity To each platform, then assembling in a larger cable, then that comes ashore. So you’re saying this has been one of the key issues of failure. I haven’t read anything about this in terms of in the in the popular press? Well,
Unknown Speaker 15:11
cable cables, transmission cables and other stuff account for about 25% of the cost of building an offshore wind farm. And they are really, really vulnerable and offshore. Again, we think that long distance transmission of power under the sea subsea ones is a problem that solved. It isn’t almost all of them unreliable. There is a classic example of a subsea transmission cable that runs from Australia to Tasmania in Australia, but from the main continental pump. And that particular cable has been a nightmare for the people who own and operate it. In terms of its reliability. We’ve even got a simple one in England, which runs from the coast of Scotland, to the coast of Lancashire, it’s only about 100 miles yet is on an off all the time. Because essentially the problems that they face in actually making them work reliably. So well
Robert Bryce 16:19
you’ve had a failure to it was it a fire in the in the cable connecting Britain to France, right just recently that that’s a two gigawatt cable.
Unknown Speaker 16:26
That to be fair was an onshore file, fire, it was at one of the the end stations of it. But I mean, the point about these is that this is sensitive, complicated, large scale infrastructure. And it isn’t easy to buy the build or make it work. And it’s a consistent matter of maintenance care, caution and the like. And, and the warning about this is essentially, that we under the second part of my story is not only is the capital costs been going up, but the maintenance costs for the wind turbines go up both over time. And as the wind farms get older, so they become more and more expensive to keep going. And this is where what we were talking about earlier, which is my projection of a 15 year life comes from, because the point is that after about 15 years, the expected revenue that you’re going to get from the wind farm is less than the cost of keeping the wind farm going. So while physically the turbines might last for 30 years, that’s not interesting, if they cost so much to keep going, that the revenue is all used up by the costs of maintaining them, maintaining the cables, and all of the other parts of the story. And this is where the divergence between my version of reality. And as it were the version that is put forward by the advocates of wind power, which is that they kind of believe that everything is going to get better, that the costs of maintenance are going to get lower, the lives are going to get longer, the costs of building them are going to get lower. And so the costs are going to come down in all directions. Whereas the experience up to today has been precisely the reverse the costs in practically every respect, apart from the cost of capital, in other words, the borrowing and so forth, right? They’ve all been going up.
Robert Bryce 18:42
Well, so let’s back up if you don’t mind. So you trained as an economist, you worked at the World Bank. So what what brought you to the your, as far as I know, one of the first, the only economists that I know of real, anyone, any analyst anywhere who’s done a very deep dive, pardon the pun here on offshore wind. But what attracted you to this? Why did you get work? Why did you get attracted to this particular area? And you’ve been doing it now for a decade or more? No,
Unknown Speaker 19:08
yeah. And there were two elements. I when I was at the World Bank, I worked on climate change. I was I dealt with essentially the interface between environment and energy. So I dealt with things like climate change, I dealt with renewable energy, and a number of other things. And at that time, I thought of renewable energy as something that was a huge bonus in the developing world, particularly solar panels made it possible to provide electricity in remote locations where the grid didn’t reach and where even if it did reach it was very unreliable. So it made it possible for people to have everything from television to pumps for water and the like. And Therefore, in a sense, I wasn’t an advocate, I was all in favor of at least the more economic forms of off grid power. Then what happened was that as we became more and more committed as countries to renewable energy, I began to wonder whether on grid renewable energy made sense, really. And I started to look at it from essentially a position that well prove it. In other words, let’s see whether this is really the case. And let’s see whether it’s really following the course that people have come to believe, which is that things start out expensive, and they get cheaper and cheaper, you know, as time and experience and so forth. And it was essentially with an open mind that I started on the question of whether the economics of renewable energy look good.
Robert Bryce 20:59
So to sort of clarify you were a believer, right? You You thought that in looking at Africa, that off grid, off grid, and of course, I agree, in some cases, it makes a lot of sense. If you’re far from town, or you’re very remote location, then it makes a lot of sense, because it’s cheaper than stringing along wire. But so you your convert that meme interrupting here, or you’ve learned that for your through your own work that this wasn’t true. I mean, if I don’t mean to evil, I will ask it that way. I mean, what’s the bottom line for you? Now? I mean, I want to hear your story. But what we cut to the chase, I mean, what do you think now? Is this all right? All the spending on renewables? Is it Miss Miss misspent Paula battle policy investment capital,
Unknown Speaker 21:38
it’s completely wasted. Capital is literally completely
Robert Bryce 21:42
wasted capital, both for solar and wind, you’re so you’re convinced it’s completely wasted capital,
Unknown Speaker 21:47
I’m more open minded about where things might go for solar than I am for, for wind, I think solar is open, because there may be technological changes that bring down the costs enough to make it worthwhile. And it’s also the case that in the right locations, and that means deserts, like the Atacama Desert in Chile, or northern Mexico or places like that, it can be very, very low cost, because the solar resource is very favorable.
Robert Bryce 22:23
But and if you ignore slave labor and poly silicon in China, or the supply chain issues, I’m sorry.
Unknown Speaker 22:32
Yeah, but those things apply to mobile phones. And yeah, I mean, our civilization is decidedly ambivalent about all of the problems with go with rare earths and the complexity of the silicon technology. But I mean, if we put those aside, and we believe that the necessary resources are available, there are places where solar power can make sense. There are also places in which wind power might make sense. And that may include Texas. But on the other hand, I’m far from sure that that include, I don’t think that that includes the North thing. And the reason is that it’s much cheaper to build wind and operate wind farms in windy, large land areas like Texas, and so forth,
Robert Bryce 23:30
where you can drive up there and a pickup truck and you don’t need a work boat that’s 60 feet long, and with a crew of eight or 10, or 12, or that a couple of people can manage the maintenance instead of having a boat that costs several million dollars, and that needs to be constantly repaired and maintained.
Unknown Speaker 23:48
Yes, exactly. And, and is that is that the net of it? I
Robert Bryce 23:51
mean, I mean, in offshore versus onshore? I mean, you’ve got saltwater? I mean, is that the fundamental issue about the in terms of the O and M that in the operation and maintenance that you’re getting to there?
Unknown Speaker 24:00
Yes. I mean, it’s absolutely those those costs, but bear in mind that I said it might make sense, because even for onshore wind, the maintenance costs go up over time, they are much lower than for offshore wind, but they are increasing and I do not see onshore wind farms going for much longer than 15 or 20 years either. Because of the increase in maintenance costs. There is an underlying physical problem. Wind turbines are highly stressed. mechanisms. They essentially were out. And at a certain age, they were at the point where it isn’t sensible to carry on repairing them. Now everybody claims everybody believes in the industry, that we’ll get better at doing that. We’ll identify where the failures are coming, etc etc. Maybe. But on the other hand, on onshore wind, they’ve had 20 years to do that. And they still not much better now than they were 20 years ago. And underlying all of that is that the costs are increasing as you get bigger and bigger, because the other big trend has been to build bigger turbines to build them higher with larger blade lengths, and the likes, the original turbines that were built in the UK and Denmark, particularly elsewhere, they were very reliable. They were relatively low cost to run, they were relatively low stressed, perhaps over engineered, but they had relatively low maintenance costs, the current ones
Robert Bryce 25:45
if they were they were relatively small, no, we’re talking about half a half a megawatt or so less than one megawatt. Right. So So is it true that is an axiomatic is okay, so we talked about axiomatic the further you get offshore, the higher the cost, but then is it true, then the and I think you’re making an important important point here, you this idea, we’re making the turbans bigger, but as you make them bigger, they cost more, right, they may have better capacity factors, but then you have more material inputs, right, and it’s still it’s just a bigger machine that’s gonna require more steel, more concrete, more copper, etc.
Unknown Speaker 26:16
They not only cost more, but they also are much harder to maintain, because think of your problem of having a boat that has to go to an offshore turbine. But now, even if you are an onshore turbine, you have to have a huge, great crane to be able to get to repair and replace equipment, you have big, big problems with the turbine blades, which are now twice as long as the turbine blades that you have, and therefore they have twice the stresses on them. They are, they are prone to what is called blade erosion, which is where junk in the atmosphere hits the blades and gradually pits them and erodes them, and they lose their aerodynamic properties as a consequence of that. Now, all of these kinds of elements, which mean that going bigger isn’t necessarily better.
Robert Bryce 27:13
But that’s, but that is the overall trend, isn’t it? I mean, this toward this gigantism, I think about it in terms of offshore wind turbines, this idea, oh, we’re, we’re going to build a bigger world, the higher the taller they are, the more people will see them. And the more people will say, well, we don’t really want to see them. Right, that there’s a an immediate trade off in terms of the view shed issue, which I know has been an issue. And in Scotland, in particular around a Loch Ness right, that that was an issue around Loch Ness that they canceled the project there. They did, they did. There was no permit issued because of concerns about tourism, because of you shed. So the taller they get, not only do you have that, you should issue but you have a cost and maintenance issue as well.
Unknown Speaker 27:52
Yes, and, and that in heavily populated countries is a major constraint on the expansion of onshore wind, right, which is what might be tolerable as relatively small turbans next to you are okay, they’re a bit of a problem because they’re noisy. But you know, if you can sort that out, that’s not so bad. But if you put a turbine, which is the height to the tip of a small mountain, and lots more people get very unhappy. And it becomes smaller and smaller the potential sites that are regarded as being acceptable to locate them. And of course, in a country like the UK, where the wind resources are said to be very good, they’re actually quite variable. We have no, we have parts of Scotland, which are pretty good, because they have quite steady and relative moderate to high winds. But we have large areas in England, which are not only heavily populated with lots of people who don’t like wind turbines, but also, which is just not very windy. And they’re not very windy, even if you go up from 50 meters to 150 meters. And so the result that we finish up is that the amount of area which can really develop onshore in countries like Britain, or Denmark, or the Netherlands or elsewhere, for wind are quite limited, which is why everyone wants to go offshore, because they think are well we’ve got much more land or sea and less people protest if they’re 50, you know, they’re over the horizon, etc, etc. But then we
Robert Bryce 29:38
will now you touched on an issue that I wanted to ask about because that that is what it appears to me and it seems to me that the same dynamic is in play here in the United States. You can’t build onshore wind turbines in the state of New York despite the you know, their mandates for net zero and you know, zero carbon electricity. Same in California. You seem an Iowa big pushback here in Cal in Texas in West Texas over a project that was proposed by a Chinese businessman. I mean, I see it all over the country and all over the world. And in your what I’m hearing you saying correct me if I’m wrong is that the backlash against onshore wind was one of the main reasons for the push for offshore wind? Is that what you’re saying?
Unknown Speaker 30:13
Yes, that’s what I’m saying. And, and it gets even stronger as people as the developers want to go for bigger and bigger turbines, because the bigger the turbines, the more visibility and the more pushback onshore, you’re going to get. So if if the the typical turbine in the US is probably nowadays, between three and four megawatts, they really want to build them at six or seven or eight megawatts. But to do that, you’re going to see them from miles and miles away. And therefore, the problem is fundamentally going to be that you simply don’t have the Accept public acceptance of them in that kind of way. And you can, you can, on the other hand, think whether you’re sensible to think about it, but you can think about building a 15 megawatt turbine out in the middle of the North Sea. You know, they’re a nightmare to maintain. But on the other hand, you will be allowed to build them.
Robert Bryce 31:20
So Well, let’s talk about that. Because when you mentioned the North Sea there, one of the things that’s intriguing to me is this, the idea that we’ll quit harvesting oil and gas in mining for oil and gas in the offshore and this is a fight now that’s underway in the United States, with the Biden administration suspending offshore leasing. But the North Sea has been incredibly important to the to Britain for energy security for its own production. Is that idea, the big idea, oh, quit producing oil and gas in the North Sea and replace it with wind? Is that is that part of this whole? The bigger picture at play here? Because the North Sea has been, you know, for 3040 years has been a key asset for the British British economy.
Unknown Speaker 32:01
Yes, the thing is that the North Sea was already a declining profits in oil and gas terms. There is a considerable amount of oil still left to be developed. But it’s in difficult locations. It’s particularly far northwest in the round the Shetlands and in the northwest and Scotland. And so it was becoming more expensive and difficult to develop. And the existing oil fields are very much running down. So we are in a sense
Robert Bryce 32:32
of just a very harsh environment, is it not? I mean, I don’t know. So I mean, the weather I mean, you your your bread, I don’t know anything about North Sea, I guess I pass through it maybe long time ago. But I mean, what is what is typical weather like in terms of tides, changes in storms? What is that in the offshore?
Unknown Speaker 32:49
Well, it’s really bad. It’s different from the Gulf, because the Gulf is very prone to hurricanes. So essentially, you have to build hurricane resistant things. The problem in the North Sea is it’s continuous, you’re being continuously battered by relatively high waves, relatively high wind speeds, and essentially an environment which has got almost permanently driving spray. So really, really difficult. In terms of the the northern North thing, it’s a
Robert Bryce 33:25
driving spray. You got aerosolized aerosol, so saltwater, that is going to affect everything that’s metal.
Unknown Speaker 33:32
It affects everything. But but it’s bad, you know, and the rigs for the oil industry have to be very, very highly protected, and the like. And the problem is that a rig might cost a billion pounds, a turbine, a single turbine might only cost 10 million pounds. In other words, you cannot afford the investment in protection. That is normal in the oil and gas industry. Also, the margins aren’t anything like as large. I mean, if you’ve got a good a good field, in the North Sea, you’re going to be generating hundreds of millions of pounds of revenue every year. You’re not going to be getting anything like that out of a single wind turbine. And so you’re trying to operate a marine technology that was developed for a very high margin industry in what is a inherently low margin industry. Electricity simply because we can’t afford to pay vastly high prices for electricity.
Robert Bryce 34:42
Well, it’s interesting it the thing that you in talking about offshore wind in the in the the difficulty of the environment. I was looking at the International Energy Agency’s report recently on the mineral intensity of various technologies, right and offshore wind is off the charts in terms of the mineral intensity particularly for copper. And if memory serves, I think it was zinc or manganese that what are those? They this is part of the the effort to know whether proof or ocean proof the the structure itself, right, you need a very specialized alloys in the metallurgy to Is that, am I correct on that? Oh,
Unknown Speaker 35:20
yes, it means and, and this is this is a sore point in Scotland itself, because we don’t in Scotland have the firms with the skills or the technology to be able to comply reliably with the high very high specifications that are required, with the result that we have these farms being developed of the coast, which have most of that capital being imported from China or the Middle East or various other places. Because essentially, the fabricators that you know, all of the service industries and so forth, that skills are somewhere else, and they have to be important. And there
Robert Bryce 36:07
is the job creation. Yeah. And you’ve written about this idea of green jobs, or the job creation for offshore wind to your saying has been minimal.
Unknown Speaker 36:15
It’s minimal, because because it’s at the low value end of it. It’s essentially the maintenance and the, you know, the low value construction, crewing the ships of the like, but but the very valuable end of it has all gone abroad. And, and the job creation, I mean, yes, this is green jobs has been a story that’s been around for a long time, and has never been realized anywhere. It’s been a running sore. And people complain in Scotland all the time about it. But it’s because they’ve been led to an unrealistic view about what was feasible in terms of that. And if anything going to get worse over time, because if the costs are really going to fall, if they were to fall in the way people expect, they will, the technology will become more sophisticated. We don’t have the manufacturing skills in Britain to do that, because we gave it up in order, in effect, to fund renewable energy. I mean, this is the sad side of the story, which is that we put heavy taxes on energy in order to subsidize investment in renewables. But that then drove the industries out of the UK to go somewhere else. And so when we then want to promo yet more of it, we find that we have to import everything,
Robert Bryce 37:43
because you don’t because you don’t have the manufacturing base to support the industry. Indeed, that’s right, exactly. So does this figure in you, you started to say it before, and I interrupted, and I interrupt my guests a lot. So you’ll excuse me, but you said about you, you were hopeful for solar. But can you say that again? So what is your attitude toward the capital spending on wind? Oh,
Unknown Speaker 38:05
I mean, the the capital, the capital spending on wind will generate relatively small jobs in in the local economy. I mean, the before,
Robert Bryce 38:23
you before you said it’s a complete waste of money, is this. Yeah, I mean, are you hedged a little bit, but tell me how I mean, overall, if you look at wind energy, onshore offshore, what’s your what’s your bottom line here sir?
Unknown Speaker 38:34
Well, as a as a as a generating technology, if we put climate change to one side, as a generating technology, there is nothing currently that competes with gas combined cycle generation, it is the preferred generation technology of choice, and that is not going to change at any time, likely in the next 10 or 20 years. Now, if you then start to worry about climate change in terms of that, the issue is that at the most favorable sights, if you put a reasonable price, not a very high but a reasonable price on the carbon emissions, you would finish up having offshore wind and sorry, onshore wind, in the most favorable cites being just about competitive with gas, and solar in the most favorable locations, again, just about compatible with gas as well. more expensively, you finish up with nuclear. And if you want low tech, the real competition is between offshore wind and nuclear power. And in my view at the moment, that works out clearly in favor of nuclear power, as currently, now, the problem about nuclear power is that we’ve made a complete hash of it, partly because of the industry itself. And partly because of the failure to have a consistent regulatory regime, we’ve had no willingness to have a clear and consistent and long term regulatory structure for safety and for other things. But the Chinese can build safe nuclear reactors, at probably a half of what we spent to build them. And at that price they can compete with I mean, they are far cheaper than offshore wind is now and is likely to be in the next in next 10 years, at least possibly the next 20 years. So
Robert Bryce 40:57
so I’ll interrupt there, because that’s one of the things that I find interesting is that today, when you when and I’m adamantly pro nuclear, I’ve been consistent about this, and we’re serious about climate change. We’re serious about reducing emissions, we have to be serious about nuclear. But I just feel like in the US and the UK, we’re not serious about nuclear. And meanwhile, the Russians and the Chinese are going full speed ahead and, and really dominating the global market. Is that how you see it,
Unknown Speaker 41:21
I launch Part A large part of this, let me go back to a little bit of my own history. Sure. Um, when I first went to the World Bank, that was in 1991, of the earliest things I did was to run the study of nuclear power in the former Eastern Bloc countries in Russia, and the various countries around that. And the issue for at that time was around safety and whether it was possible or desirable to invest in new safety measures. Now, at that point, in where we were choosing between any fact the option of gas of which there’s lots or nuclear power, I always consistently felt that gas was a much better option for those countries. But on the other hand, as the future of gas becomes more clouded, because of the concerns over climate change, then the issue of nuclear is one where we need a consistent framework. The problem in the EU, US and in the UK, has been a complete failure to standardize to standardize the technology to standardize the regulations. And to learn from experience, the only country which did that properly. They hadn’t done it recently, but they did it in the past was France, sure where they standardized on a program, they got the cost down, and they learned how to run build them and how to run. The problem is that France made a complete mess of jumping the technology to what is now called the EPR. Right, and they got your own
Robert Bryce 43:07
European pressurized reactor, which now they finished one in Oka Ludo in Finland, right?
Unknown Speaker 43:14
Finland, but it’s the same that one that they’re building in the UK, and actually had similar problems in China, as well as in France. So they’ve got four really, really troubled projects, which are because of their failure to get the technology right, and to standardize properly. But on the other hand,
Robert Bryce 43:35
so you’re in Britain, you’re talking about size, we’ll see. So this this project that’s been waiting and or noise, gotten Vega
Unknown Speaker 43:42
points. Hinkley Point Forgive me, the one that’s being built to the point now.
Robert Bryce 43:46
Okay, right. And but has that been green lighted, I thought that that project was still being constructed. It is now Okay,
Unknown Speaker 43:52
gotcha. It’s way over. It’s way over shedule, it probably won’t start operating until 2028. So it’s six or eight years late. But you see this as part of the problem. You can’t make nuclear work. If you’re going to take 1015 years to build the damn things. You’ve got to you’ve got to standardize it. And the people. I mean, there are two people, the Chinese have learned how to do that, arguably, the Koreans have as well, in terms of the they’re all pressurized reactors, but but they know what they’re doing. And there is hope for the future. They mean lots of the people who believe in SMRs small modular reactors are essentially believing that by making them smaller by standardizing them, they can bring the cost down by making them you know, cookie cutter Sure. percussions right. But we’ve yet to learn whether you can do that. What what what the really good operators have learned How to do them with the existing technology, not the very small ones, but with big ones. And in China, for example, I’m completely convinced that their nuclear power program is the real way that they are going to replace coal in the longer term. It’s essentially to build nuclear plants. They won’t build them, of course, in the West of the country, they build them in the east along the coast, where the sites are good, and so forth, and where the demand is, right?
Robert Bryce 45:34
Because that’s where the part that’s where the population.
Unknown Speaker 45:37
Right, yeah. And everyone talks about the big investment in wind, and solar in China. But when you look at the real numbers, it’s tiny in relation to the size of the Chinese economy. That’s interesting.
Robert Bryce 45:51
I hadn’t thought about that comparison between the Chinese investment in nuclear versus the Chinese investment in solar and wind, because, you know, here in the US, I’m sure you may be in the same in Britain is that? Oh, well, look at that, you know, the Chinese are they’re just stealing a march on us look at all their green investments, green investments, and of course, they’re building coal plants left and right. But do you have any idea of the numbers of the scale on the on the nuclear spending versus the versus what they’re spending on wind and solar? Have you looked at that?
Unknown Speaker 46:17
Oh, I don’t know the exact figures. But my guess is that they’re spending much more on nuclear spending on it. I mean, the the nuclear program that they have underway, is much bigger in practical terms, because, of course, we have to adjust the load factors, sure, in terms of their their operation. But the other thing is that all of the wind is being developed in the desert of western China. That means 2000 kilometers of transmission lines, to get them, many of the wind plants that have been built in China don’t operate, because they’re constrained off the system because they can’t get the power from where it is being generated to where the demand is.
Robert Bryce 47:05
And let’s talk about that. Because that’s been the other issue that now looking at it from, you know, I’m in Texas, you’re in Edinburgh in Scotland. But it seems to me that that issue of high voltage transmission has been the other big issue for development of onshore, we talked about the problem of offshore wind cables and bringing that that power ashore and the cables in the fragility of it. But I’ve also noticed these the backlash against the the building of high voltage transmission projects, you call them pylons over there, I guess we call them the transmission towers. But it seems to me to be exact same issue around land use conflicts and people saying we don’t want that in our neighborhoods. We don’t want this here. And is, am I reading that right? In the politics of the development of renewables there?
Unknown Speaker 47:46
Oh, oh, absolutely. You don’t see it quite as visibly, because the jurisdictions or the permissions for developing pylons, versus those for developing wind farms are a bit different. And so they get away with it a bit more easily in the UK. But in Germany, for example, they have a huge problem of bringing the power from the coastal areas of northern Germany, down to the main demand centers, which are in the middle of the south of the country. And, and, and if you think about it, you cannons are never popular. And nobody likes to be under a very large transmission tower. But if you’ve got a very high voltage one, and you’re willing to spend the money, you can put them underground. And they’re pretty unreal, they’re pretty reliable, when they put on the ground in the right kind of conditions, you can do
Robert Bryce 48:45
a little bit, but the cost is three or four times the overhead cost, correct, they
Unknown Speaker 48:49
cost a lot more. But if you build a single transmission line in that way, from a nuclear power plant, to the main grid, then that’s a cost that you incur once. But if you’ve got wind farms all over the place, you’ve got to build the pylons, and you’ve got to build the wires and everything like that in lots and lots of different places. So the problem is that in order to the underlying problem is land is scarce. Land is scarce, not only for actually generation, but for all of the associated infrastructure. And in heavily developed areas of country. People don’t want the land to be used for infrastructure. They don’t want roads, either. Lots of other things. So essentially, you have to ask the question, what makes best use of the land and that nuclear power is much better. So his gas is much better? Because gas, you know, the thing you do with gas is you put pipelines underground, and and you can plants you know, gas fired Answer not noisy, they’re not obtrusive. They’re easy. And you can build them practically anywhere you like. Whereas wind turbines, and solar farms even are just simply unpleasant neighbors, and undesirable as forms of landings. When you
Robert Bryce 50:19
make a key point, and it’s when I mean you’re singing from my hymnal here, sir. So I’ve been writing about this now for 10 years, but we’ve in the US over 300 rejections and restrictions since 2015, from Maine to Hawaii. But the same happening with with solar. I mean, this summer, we saw big solar projects in Nevada, Montana, Pennsylvania, all rejected by local authority saying we don’t want these projects here. And the same with the high voltage transmission. I mean, we have entire states including Iowa, Arkansas, who have rejected that have rejected high voltage transmission projects. So I completely agree with you in the land use being the binding constraint. But let me turn to I was looking at your the paper that you wrote for the Renewable Energy Foundation last year. And by the way, my guest is Gordon Hughes. He’s a professor of economics at the University of Edinburgh. You can find more about him at RAF dot O R g.uk. A lot of his work is available there. But in your paper last year, you wrote for the in, I’ll read it, he said in 2020, the regulator off Jim published as part of a public consultation, a document prepared by the National Grid Electric System Operator in GE, so on the levelized cost of electricity, but redacted almost every single substantive number. So that caught my eye because you’re doing the work kind of a journalist, you’re doing the work of an economist of the investigator of an analyst. And what you are implying here is that the government’s hiding the ball in terms of what’s really happening. Am I reading you right here?
Unknown Speaker 51:48
Yes, that was a particularly controversial project. It’s a project that is being developed in Shetland. Shetland is a group of islands, considerably to the north of Scotland. And they are
Robert Bryce 52:04
famous for famous for their terrible weather, I understand, yes. And really
Unknown Speaker 52:08
closer to Norway, and to the main parts of Scotland, and historically, part of Norway for a long time, but you know, because they were settled by the Vikings. And so essentially, the proposal for the project was going to be a very big wind farm in a particular area of flatland, which people were unhappy about. But then in order to make sense, they have to export the power. So they then had to build a transmission line from Shetland to the shoulder of Scotland, near to relatively near to Aberdeen. Distance of I don’t remember the exact number, but 350 miles.
Robert Bryce 52:57
And this was an offshore project or onshore just to be
Unknown Speaker 53:00
clear, it’s technically onshore. Okay, but it, it looks like an offshore project, because essentially, it’s purely being exported to the mainland of Scotland, right.
Robert Bryce 53:12
So in short, the Germans work, the turbines were being put on on on the island, but they were going to export the power through an a subsequent subsea cable.
Unknown Speaker 53:19
Okay. Yes. And, and so essentially, the issue was, would this make sense if you looked at the costs of not only developing the wind farm, but building the transmission cable, right, because in Britain, we require the offshore plant plants, they pay the cost of transmission from the offshore wind farm to the mainland, and they link the link to a substation, and the costs up to that substation are borne by the wind farm. So I was basically saying, Look, if you looked at this, logically, you do the same for Shetland, you’d essentially require that the costs of the transmission line from Shetland to the mainland would be borne by the developer of this project called Viking project, right? Of course, they’re not going to divert pay that who people are going to pay or electricity customers in London. And so from the point of view,
Robert Bryce 54:21
this is a time honored tradition, right, socialize the cost and privatize the profits, right? This is exactly
Unknown Speaker 54:25
what’s going on. And so, and they did not want to be challenged over this kind of process of socialization, which is why they redacted all of the numbers, because they look so bad. And some of the numbers have crept out subsequently, but they look terrible. In terms of
Robert Bryce 54:48
what are we talking a couple $100 per megawatt hour, a couple 100 pounds?
Unknown Speaker 54:52
Oh, yes, you’re talking in excess of a couple of 100 pounds per megawatt hour,
Robert Bryce 54:57
because in one of your other documents you We’re talking about the Beatrice project in the in the Moray Firth and northeast Scotland will have a contract for difference strike price of 162 pounds per megawatt hour. Now, I haven’t done my British British pounds to dollars comparison lately, but over $300, we
Unknown Speaker 55:16
know it’s not quite as high as that. That’s, that’s somewhere of the order of 220 $230. Okay. But it’s pretty high.
Robert Bryce 55:29
But still, let me you know, last year, I’m in Texas, which is an anomalous in the US, but there’s still our average wholesale price in Texas last year was $22. If memory serves, I mean, you know, this is partly due to the effect of wind and so on. But these are incredibly high prices. I guess my observation here is that all of the offshore projects that I’ve seen all of them, they have contract prices that are far, far above what is the common wholesale price in the markets in which they serve
Unknown Speaker 55:56
these, but this is where the people claim that that’s all going to change in future, it’s all miraculously going to get better. Because they say, Oh, well, a miracle
Robert Bryce 56:08
will happen and save our bacon in the future.
Unknown Speaker 56:10
Actually, yeah. And, and, and the cost, they say that the costs are going to come down to around 40 pounds per megawatt hour, which is more or less equal to where the market price was, a couple of years ago, I mean, bear in mind, the last year in Europe has gone mad because of the gas prices and churches prices have gone through the roof. But but you know, the long run prices are around 40 pounds per megawatt hour. And so they’re claiming the offshore wind is going to get down to that level. What makes it even more complicated is that people are also claiming that they are bidding for these contracts for differences in order to supply at 40 pounds a megawatt hour. The problem is whether you really believe that they are going to supply at that kind of level. Because the contracts are very complex, the contracts are subject to being fabricated, in other words broken by the suppliers. And I very strongly believe that either the people who have promised that they’re going to deliver that kind of price, are essentially going to lose their shirts. Or alternatively, that they’re expecting something to change in future. And they’re going to abrogate the contract and get much higher prices, because and socialize the costs, and socialize the cost. So So essentially, they’re hoping to be bailed out by some big change in future. And that, and I mean, my, in a sense, my challenge to the people who say that the costs are so low, is I will write a five page contract, with no get outs, with an absolutely firm commitment to deliver. And you sign up for that for the next 30 years. And if you’re willing to do that, I’ll buy the story. But until you are willing to do that, then any fact this is a game in which we are only seeing a half of what is going on. And the rest of what is going on is essentially a whole series of either implicit subsidies or expectations that things are going to change in future and the like, if
Robert Bryce 58:38
they’re going to do some kind of government engineering to make it work somehow.
Unknown Speaker 58:42
Yes, of course, that because Is that is that the
Robert Bryce 58:45
right word? I haven’t heard that term before it just kind of my head, that you’re going to somehow get the government to pick it up?
Unknown Speaker 58:52
Yes, of course. Well, it is won’t be the government, it will be you and I. But I Yes, I might, you know, and my, the people who live in the United Kingdom, because essentially at some point or other, either these projects go bankrupt. And they have to be bailed out. Or alternatively, they are going to be indirectly bailed out by being offered much higher prices than apparently they were being promised in terms of that. And so either
Robert Bryce 59:25
they either go bankrupt or they make the consumers pay for their costs.
Unknown Speaker 59:30
Yes, that’s right. And the big danger built in this is that we’re all being urged to invest in green investments. So all of the governments around Europe are telling their pension funds that people saving should be invested in this kind of thing, whether it be solar or whether it be wind farms or whatever. And this they claim is going to be a good investment. Well, what happens when 20 years down the line, a whole bunch of these go bankrupt, and people’s pensions get badly hit. Now, there is all kinds of ways in which the outcome of this could be very messy, and very unpleasant and very painful for the people who have bought into the story that these costs really are going down very greatly.
Robert Bryce 1:00:25
Well, you it’s interesting that you bring that up, because it reminds me of the knock on effects of the shortages of gas now in Britain and the shutdown of your fertilizer plants or your fertilizer plants are being shut down, because gas prices and that gas prices are so high. And then if what happens in your one, year two, year three, where you don’t have enough fertilizer for your farms, your food production goes down your food prices go. I mean, the knock on effects of all of this craze is what I would call it seem to be completely under appreciated. But But what’s it root here? I mean, it seems like the social marketing is part of this, right? That there’s just incredibly effective social marketing and the main, the big media outlets, and all of them are just kind of bought on board. Oh, these offshore wind is going to be so great. So great. So musc it here in the US as well, is that what do you attribute this to this kind of mania the craze around it? Because you’ve made it very clear, you’re not a fan of what’s going on? What’s What’s the driver here?
Unknown Speaker 1:01:22
I think there is a a larger social disconnect, which underpins all of this. Most of the enthusiasm for these kinds of things comes from what we would call liberal burn. Often relatively young people, right? Well, this is notoriously a group with practically no engineering, or scientific skills or experience with very little practical, day to day experience of the nitty gritty of making things work, and so forth. And that’s why I introduced myself by saying that at heart, I’m as much an engineer as I am an economist, in the sense that I was brought up on a farm, I live in a rural area of Scotland, I ran a broadband system, which is designed to do very thinly populated areas. Those are things where you have to get things right, where you have to live with the reality of the weather, the land, all of those kinds of things. People are divorced from that when they live in London, or even in Houston, or in Austin and the like. And, and it’s very easy to buy into the story, that everything looks like what has happened to smartphones, that everything looks like the silicon revolution. And it’s very hard to comprehend that that’s not the way the world looked, when I was much younger than I am. I’m 75. Now. So I’ve seen the way the world has developed since the 1960s onwards. And it’s been much more difficult and much more painful the changes, and in most cases much slower in terms of the kind of hype about development, that is now accepted as normal. And so essentially, you have a combination of journalists of lobbyists of many, many other people who simply are divorced from the day to day reality of the things that they are making these claims about. And because they are living in this kind of bubble. I mean, I find it very hard to blame everything on sort of mainstream media and the like. But there’s no doubt that there is an urban bubble, and I lived in it when I lived in worked in Washington. It’s just so divorced from the rest of the country. I mean, everybody Washington is completely me, you referred to flyover country. It’s a standard term, but it’s a horrible term. It’s derogatory about if in Iowa or Montana or or all of these other states in terms of that.
Robert Bryce 1:04:30
Well, I think that that and I talked about this a lot. It’s the urban rural divide, and you see it in the voting maps here in the US where the you know, overwhelming number of rural counties in America voted for Trump and vote Republican where the cities vote democratic right and and that that’s, but that’s, I think it’s it rhymes with what you know, what you’re talking about, makes sense to me because there is this schism between the the people who consume natural resources and the people who produce them, right and that that very big divide. And they’re the people who consume them who’ve never worked on a farm never, you know, had that experience of working with their hands or, you know, driving a tractor or producing things or pulling things out, pulling things out of the ground, they have no idea what it entails. And so I think that that, that’s, that’s fundamentally at work here. But is that what drives you? Because, um, you know, you’ve been passionate in your discussion here. And you’ve obviously been working on these. So what makes you care about this so much?
Unknown Speaker 1:05:25
Well, the biggest story is that, I said that I was committed to renewables, because of what you’d offered in developing countries, to poor people off the grid, the whole of my life has mostly been focused on developing countries on alleviating poverty, on all of the things that come with economic progress. And I see this commitment to renewable energy as profoundly dangerous, from the point of view of economic development in future. Because if we were to push all of the developing countries to rely on wind turbines, or even solar panels, we will push them into a world of expensive energy, we would greatly reduce their ability to gain the benefits of economic growth. And so ultimately, my biggest motivation is that do not impose this on Africa, do not impose this on Brazil, or arm or India, or many of the other places that, you know, that I have worked over, simply because this is an obsession of a small part of the world’s population adopted without understanding what the effect is going to be on the majority of the rest of the world, in terms of that. And that that is, that is a real concern, in terms of the what I saw when I was at the World Bank, which is European, and Americans, Europeans and Americans, believing that what they thought was normal should be imposed on everybody else, even if it was not appropriate to the levels of development, the technology, the capacity of the countries concerned. And so what I see is this commitment to renewable energy as just being forced on countries for whom it will be not to put too mild it disastrous.
Robert Bryce 1:07:50
It’s, I really am enjoying hearing what you’re saying, because it’s, it speaks to your commitment that I mean, what I hear you saying, is this your purpose? I mean, you said you’re 75, that this is your purpose in what your life is, now that you’ve seen, you’ve seen you’ve grown on a farm, you’ve been to that you’ve seen the potential but as you’ve looked at it, you’re realizing well, that we’ve been sold a bill of goods is that making Am I Am I summarizing where you are,
Unknown Speaker 1:08:17
what both my academic and my practitioner career as a, as a policy maker, and as a practitioner, was devoted to developing countries, I only really returned to deal with, as it were my own country and the developed world a decade ago. We’re at the point, as you say, when I started to look at renewable energy, and various other things, simply because I saw what was happening in terms of the developing world of being pushed with an agenda, which wasn’t about them. It wasn’t about the interests of people who live in the Congo or in many other parts of Africa. It was about the guilt and concerns of people in rich countries, simply not understanding or not willing to think about whether this was suitable. And there was another element to all of that, which is at that time, I also read a very large study at the World Bank carried out on adaptation to climate change. And I became convinced at that point, that we will be better off slowing our attempts to mitigate climate change, and do more to adapt to it, particularly in the developing world. And my concerns have been that all of the emphasis on renewables and on slowing climate change, have essentially not been in the interests of developing countries because they would have been better off going slower and adapt spending more money on adapting and living with climate change than a relatively vain effort to slow up the process by a very large expenditures on mitigation. So this is not about saying, you know, what we talked about earlier, this is not in any way about challenging whether Chinese change is occurring. It’s about how we should respond to that.
Robert Bryce 1:10:30
Well, in what you’re what I hear you saying is very similar to what Bjorn Lomborg has argued I, if I were to, you know, distill down, what he’s saying is that mitigation is going to be far too costly, and we’re better off. Adapting is that that’s that he’s been on the podcast as well. And that’s
Unknown Speaker 1:10:46
Bill beyond LOMBORG. And I show almost exactly parallel views. And actually, for reasons that go beyond that, because he’s done a lot of work on the health effects or climate change, and various other things like that. I’ve never met him, I’ve never talked with him. But essentially, I believe that he has gone down a route which any intelligent economist open minded economists, with a primary concern with developing countries could well have gone down as well. And that is to say that climate, there’s another element, climate change isn’t the most important from the world as a whole, not from the point of view of rich countries. But for the world as a whole. Climate change is not the most important environmental problem. We’ve known that for 30 years. And I wrote the first papers on actually the importance of climate change for the World Bank. So but the point is that you go to China, and you understand why China puts other things first, because for them, urban air pollution is far more important. And they need to do something about that. And then for then, therefore, their primary concern is to deal with their problems, rather than with global problems. Sure, and how, and they will do that. And that’s why mitigation is going to be so difficult, because China knows what it wants to do. And in the end, isn’t going to be pressed to do something different.
Robert Bryce 1:12:27
Right? So my guest, again, is Gordon Hughes, Dr. Gordon Hughes. He’s a professor of economics at the University of Edinburgh in Scotland, you can find his work at our e f.org.uk. That’s Renewable Energy Foundation. So Gordon have taken up more than an hour we’ve, we’ve been going on and I could probably talk to you all day. But I always asked two questions. In summary from from my, my guests. We’ve talked about a lot of things, what gives you hope.
Unknown Speaker 1:12:54
I’m not much to be. I fear that the route that we’re on in the rich world, is a route, which is simply going to lead to the passage of economic and probably cultural and other power from the old countries of Europe, and even probably the United States to Asia, over the next 2030 years. I think that’s almost inevitable on the route that we’re set on. And the consequence if
Robert Bryce 1:13:33
I can interrupt because I read a piece just in the last few days, and in the author, it was very clear, it was very clever. It was in Zero Hedge. I recall, I don’t recall the author’s name, but he called what’s going on in the US and the UK, unilateral energy disarmament. Is that does that ring a bell with your does that rhyme with what you’re thinking?
Unknown Speaker 1:13:50
I mean, basically, what it’s doing is deliberately foregoing the kind of economic activities, which rely heavily on energy, by pushing up the prices of energy, so that what is left is essentially marginal conduct, all of the the real value added is going to be some of it is in intellectual property. But that intellectual property can be stolen and is eroded over time. And so gradually, that things in terms of producing goods in terms of producing Roman materials and so forth, those are going to pass to Asia, particularly maybe to Africa, but I think primarily to Asia. And And essentially, we in the Western countries are deciding that we are in effect rich enough and don’t care enough to essentially go almost into the position of China in the 18th century, which is terrific. treat from the world.
Robert Bryce 1:15:01
And for the rest of in de industrialized.
Unknown Speaker 1:15:05
I de industrialized. Yes. And
Robert Bryce 1:15:11
so, will I’ve done dozens of interviews on the podcast and ask people what they? What gives them hope? And you’re the first to say nothing much. That’s okay. What are you reading?
Unknown Speaker 1:15:25
Am I reading?
Robert Bryce 1:15:26
Yes. What are you reading? What books are on your nightstand? Or on your desk? Or what are what are the books that you’re paying attention to these days?
Unknown Speaker 1:15:32
Oh, um, the main ones I’m reading at the moment. I mean, I fall nature, I read historical history. And I’ve got two books on Chinese history in the later part of the final centuries BC, and the first few centuries AD, which is that the great expansion of Han China, and then it’s challenged from other parts of Eurasia.
Robert Bryce 1:16:05
You know, the title that from the book, just any specific titles that you can mention?
Unknown Speaker 1:16:09
Oh, I, I don’t recall, unfortunately, the title. Because it’s, it’s a set of histories written by Mark Andrews or something like that, anyway, but but, but I have always been fascinated to read the histories of the countries where I’ve worked. And for a long period of time, I have worked on an office in China. And I have very strong interest in not only economics of what is going on in China, but also the history of it as well. And that’s why I’m reading about the various periods. I mean, the particular period is the Warring States period, when, because essentially, China is an old, old civilization, even by our standards, right? I’ve also read a great deal about Japan. And what you see a bachpan is the extent to which Japan developed on the basis of what it will not admit this, but on the basis of what it got from China. That, you know, Japan developed, the most famous period of Japanese development was in the second half of the first millennium, in other words, from roughly 500 to 1000. AD, and that was based on importing a whole series of cultural things from religion, wood, Buddhism, and so forth from China. So, China is the oldest extant, yet still present civilization that is just simply fascinating. And about which too few people in the West know anything.
Robert Bryce 1:18:00
Well, let’s end it there. That was, that was deeply enjoyable conversation. My guest has been Gordon Hughes. He’s a professor of economics at the University of Edinburgh. You can find out more about him at RAF that’s Renewable Energy Foundation, RT F dot O R g.uk. Gordon, it’s been a pleasure. Many thanks for being on the power hungry podcast.
Unknown Speaker 1:18:20
It’s been very interesting. I’ve enjoyed it. Thanks.
Robert Bryce 1:18:23
And thanks to all of you for tuning in to this edition of this episode of the podcast Make sure to tune in the next time and if you have a minute then give us a those positive ratings on those podcast thingies, which is pretty easy to do. I think so. Until then. Thanks, y’all.