Plenty of experts warned us that the transition to renewables would be painfully expensive. The same people also predicted something else: blackouts.
I remember how the world laughed at them. A bit like they laughed at Trump’s warnings about Europe’s reliance on Russian gas. The whole audience at the UN was in titters, back in 2018…
The electricity grid experts’ warnings were ignored too. Over time, renewables share of the grid grew and grew, especially in Spain. On my birthday, the country celebrated a major milestone. Renewables powered the country for a full working day.
Huzzah!
Two weeks later, disaster struck. Europe’s largest ever blackout.
Blame it on the weather, man
It’s still not clear exactly what happened. Not that this stopped everyone and their dog from laying the blame on social media within minutes.
As is tradition by now, the Spanish authorities blamed the weather. They called it a ‘rare atmospheric phenomenon.’
While admitting they haven’t figured out the cause, they’re also promising ‘it won’t happen again.’
But the experts that anticipated large scale blackouts didn’t seem to mind laying the blame on renewables within minutes either.
Are they just as dodgy?
Perhaps. But I don’t think so. Because they don’t necessarily blame renewables for triggering the blackout. They claim renewables make a grid too vulnerable.
Shocks happen to energy systems all the time. For all sorts of reasons. The real question is how much it takes to cause a blackout.
And that’s what renewables undermine. They make a grid less robust to shocks, cause blackouts to spread further and faster, and make recovering the grid dramatically more difficult.
I explained how in a special report for Strategic Intelligence Australia subscribers in September last year.
One key take away is that the initial trigger of a blackout is a red herring. Whether you blame a cyber-attack, the weather or a solar panel is irrelevant.
The fact that Spain’s blackout spread rapidly, over great distances and lasted a long time proved the sceptics right. The grid was on a ledge thanks to renewables. It only needed a small push. But you don’t blame one snowflake for an avalanche.
Not just predictable, but profitable
Geopolitical investment analyst Jim Rickards knew all this back in 2022. He warned subscribers of Strategic Intelligence Australia: ‘Wind and solar cannot power the grid. Europe’s choices will be rationing and blackouts, not a green new deal.’
Since then, Europe’s had both rationing and now a major blackout. And Europe’s industry has struggled with a lack of expensive power, as Jim predicted too.
So the turn away from wind and solar was only ever a matter of time. The only question was how bad things would have to get for politicians to see this.
Would it take a blackout? Or just impossibly high electricity costs? Perhaps having businesses regularly shut down operations to preserve power?
How much renewable energy can an electorate bear?
Of course, politicians respond to their electorate. So you would’ve thought that higher bills would be enough.
It’s clear that countries with higher shares of renewables have higher prices. Watching the Americans pay for cheap power should’ve made the Europeans give in.
This, published in the Financial Times, shows the extent of European politicians delusions: ‘Christian Ehler, a CDU lawmaker from northern Germany, said electricity bills were paradoxically higher in regions that had a lot of cheap renewable energy.’
Yes, paradoxically…or should we say predictably?
It’s not like politics hasn’t responded. In the UK, former Prime Minister Tony Blair called his party’s Net Zero plans ‘doomed to fail.’ The UK opposition leader called her party’s Net Zero targets ‘impossible’ before the blackout in Spain. And polling leader Nigel Farage has long predicted blackouts in the UK caused by renewables.
Renewables sceptics at the AfD party in Germany are now polling in the lead. This after the German government has been felling wind farms to get at the coal underneath them for years.
In September comes another test for the renewables obsession engulfing the developed world. Norway will have an election. And cutting cable ties with the EU’s chaotic grid is on the ballot.
Without ‘the battery of Europe,’ the EU’s renewables plans look absurd on paper, let alone in reality.
Spain’s blackout came too late to save the Canadians from another climate alarmist government.
The big question is whether it’s just in time to save Peter Dutton. We’ll soon find out.
But if Europe abandons renewables, there won’t be many places left to keep us company.
Net Zero’s blackouts have barely begun
It’s worth noting that events in Spain unfolded precisely as anticipated in my analysis over at Strategic Intelligence Australia. The size of the blackout, the cascading effect, the struggle to get the grid back up…
You can read about it all in a special report called ‘Electric Cholera’ by becoming a subscriber, here.
Suddenly, social and mainstream media is alight with the terminology I introduced to subscribers back in September. Things like inertia, frequency and the risk of outages spreading across a country and then borders.
Despite the Spanish Prime Minister’s best attempts, everyone blames Net Zero for what happened. Even a Reuters article with the title ‘Don’t blame renewables for Spain’s power outage’ starts by blaming renewables for Spain’s power outage:
While it may be tempting to blame the unprecedented power outage that hit the Iberian peninsula this week on the rapid growth of wind and solar power in Spain, reliance on renewables is not to blame. Rather, the issue appears to be the management of renewables in the modern grid.
Yes, it’s tough to manage weather dependent intermittent DC power sources that don’t have inertia and rely on a huge grid remaining functional…
But who cares about Spain’s blackout?
During the pandemic, governments relied on models that made assumptions. As those assumptions were undermined by experience, the policies changed.
Today, it is accepted that lockdowns were a bad idea. But we had to learn the hard way first.
The same thing just happened in Spain. The world learned what it means to transition to renewables the hard way. And that means politicians can now abandon models to harness Spain’s blackouts to justify change. A radical change in energy policy is coming.
Last year, we predicted all this would come to a head. Now that it has happened, investors should be asking where energy policy goes next. What’ll replace renewables?
Given the size of the spike in renewables stocks until 2021, it must be an impressive investment opportunity.
Will it be nuclear?
Is natural gas going to come roaring back as a source of baseload power?
Will electrification be delayed to accommodate a lack of power from renewables?
Or will power storage get built on a vast scale to make renewables look viable?
Over at Strategic Intelligence Australia, we’ve covered each possibility in recent years. And taken our positions accordingly.
Back in 2022, Jim Rickards already knew what’d happen. He detailed where the world will turn once the lights go out:
This leads back to oil and natural gas (or coal), which the G7 has just agreed to do without. None of this makes sense. There are no ready substitute supplies of oil and natural gas.
This from the man who claims to have the largest non-commercial solar array in New England, by the way. So he’s no renewables sceptic. Just a realist who understands the day-to-day limitations of renewables first-hand. As does his wife, I’m told…
Together with Jim and his team, we’ve just released a report detailing which eight stocks stand to benefit most from the coming global U-turn on Net Zero.
The thing is, the US already has a head start when it comes to returning to a sensible energy policy. Nuclear plans are rapidly advancing. Natural gas is cheap and abundant. Export terminals are popping up.
Even the climate alarmist governor of California has changed his tune.
If the Californians and Tony Blair have turned their back on Net Zero, its time your portfolio did too. Here’s the eight stocks to own from the world’s awakening.
Until next time,
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Nick Hubble,
Editor, Strategic Intelligence Australia
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