Roger -- "Claims that low-carbon energy is bankrupting the economy are not supported by this data." Not yet at least. What is missing is the investment required for wind and solar to assure system stability and reliability, an issue that has bene discussed at length in these posts. What is relevant to this analysis is those costs are non-linear -- modest at low penetration - largely the experience to date, increasing in a non-linear fashion as penetrations increase. Germany conducted a reality check because low-cost renewables have begun to impact the economy -- they are at a "crossroads" because system investments are beginning to become significant.
thank you Roger. However, here you are relying on incomplete data which obscures the reality of wind and solar. indirectly you are relying on LCOE, levelized cost of electricity, and not Full Cost of Electricity FCOE. The analysis woud look entirely different if you include the full cost. the reality is that wind and solar are the most expensive way to generatre 24/7/365 power... and they get more expensive the more you have. Wind and solar also increase the cost of coal and gas as those assets are being used less the efficiency declines
- reasons are based on low energy density, intermittency, and short operational lifetime
there is honestly no more doubt in energy economic circles that wind and solar increaes costs of providing a reliable grid and do so exponentially (it gets worse the more you have, Germany is the best real life example). Your analysis does not show that bc you are looking at only part of the cost of wind and solar.
therefore, i would honestly review the analysis and conclusion so you dont fall into the LCOE trap
some details here with all links, there is also a peer-reviewed paper on this from me
Schernikau, Dr Lars, William Smith, and Rosemary Prof. Falcon. “SSRN: Full Cost of Electricity ‘FCOE’ and Energy Returns ‘eROI.’” Journal of Management and Sustainability 12, no. 1 (2022): p96. https://doi.org/10.2139/ssrn.4000800.
Roger, I clicked through "How I use AI", expecting to find, well, how you use AI, for example to generate figures. Instead I found more of a "what I use AI for". If you find time to write up some examples, with the inputs, prompts, and optimization that produced your beautiful illustrations and figures, this subscriber would be grateful.
This statement is misleading: "In principle, as wind and solar costs continue to fall and their share of the grid grows,⁴ the utilization rates of fossil plants will decline, their per-unit fixed costs will rise, and the economic case for keeping them running will erode — and policy can create conditions that influence the rate of change."
Electric grid reliability requires power (KW), as well as energy (KWh). Physically, most power is provided by reliable and dispatchable generation, such as fossil or nuclear generation. Wind and solar (W/S) are neither dispatchable nor reliable. So W/S must be backed up by reliable and dispatchable generation or by reliable and dispatchable stored energy.
Backup battery storage for W/S, in the total absence of backup fossil, stored hydro, and nuclear generation, is prohibitively expensive because the required battery capacity for year-round backup is massive -- typically around a three-month supply of energy stored in high W/S output months to be released in low output months. That's because W/S output is seasonal, with much reduced output in the cooler months. That also means that the W/S system peak capacity must be considerably greater than the system peak demand to support battery charging without compromising on-peak grid reliability.
Increasing utilization of W/S on a grid does, as stated, reduce the utilization rate of fossil-generating plants and increase the per-unit cost of fossil generation. But W/S installation also drives up the total cost of electric energy to consumers because adding W/S increases the system capital cost to provide W/S and related new transmission, without adding reliable power, which would allow reducing the capital cost of backup storage and generation.
For example, electricity costs have tripled in California (where I live) over the past three decades because California legislation has driven rapid increases in the use of W/S energy. The current annual rate of electricity price increase in California is 13%/year. And that's before the federal subsidies for W/S installations have fully expired.
Anyone can confirm that W/S is not economically competitive by noting that W/S must be supported by subsidies and/or by state legislative preferences for W/S over fossil fuels.
So essentially what you are describing is future energy growth would come from zero carbon sources. A simplistic interpretation, but I think accurate. And this won’t happen unless there is heavy handed government involvement.
A real life example is where Europe has gone with their energy infrastructure. Their move in this direction was due to heavy handed government involvement. Look at what it has done with their economies.
1. Gasoline includes diesel fuel? And I expect LNG cars/trucks are too small a market, but where is their contribution captured?
2. How is residential solar (and light commercial solar that acts like residential) consumption calculated? The power, in most applications, goes both to immediate use as well as back to the power grid. And some is directly charging an EV car. It's the non-grid part that is not metered/captured in any meaningful way. And how is the meager purchase price provided by the power grid for excess solar power captured?
Under the original concept of net metering, residential solar customers received the full retail price for excess power provided to the grid, leaving the capital and transmission costs of supporting solar customers to be paid by non-solar customers. Recently, utilities have begun to move toward paying the wholesale power value, which may be zero at times when the local grid is oversupplied.
There's a lot of information here but not sure where it all leads. One thing that jumps out at me is $100/BBL oil in 2026 is far from the same thing as $100/BBL oil in the 1970s and '80s. LNG and extensive fracking for gas is serving us (the USA) well in today's world.
It's difficult to not look at this post in the context of what's going on in the Middle East right now, but you've already said that you want to keep the 2 separate. Not sure why, but like I said before it's your Substack.
As you write this is an extremely complex subject and very hard to unwind. It defies analysis because of multiple "what ifs." I will just point out a couple of them:
If transitioning from fossil fuels is desirable, why are so many energy intensive European companies (from countries where net zero is a priority) moving to Texas? Examples: BASF, OCI, Linde, TotalEnergies, ArcelorMittal, among hundreds of others. They cite energy costs as a reason for the move.
The problem with just working with U.S. numbers is that energy users move where energy is cheapest and, since 2008, energy costs in the U.S. have fallen rapidly. The real energy game changer is shale gas and oil, not wind and solar. Having studied shale gas and oil potential in the UK, France, and Poland, I'm still amazed that they have done nothing to develop their considerable resources. The longer they delay, the worse it is for them.
It's hard to see the reason or mechanics of a change when the change is happening.
Dear Mr. May, In the English Midlands there is a geological formation of shale rock which is estimated to contain AT LEAST 822 trillion cubic feet (tcf) of natural gas. The UK uses about 3.3 tcf of nat-gas per year. Yet the Midlands shale cannot be exploited because hysterical protests from green zealots persuaded the UK government to limit earth tremors from hydraulic fracturing to less than 0.5 on the Richter scale. A commercial truck driving by your house will generate a 0.5 Richter tremor! So the Midlands shale slumbers untapped while the British pay four times what we do for electricity. Exploiting this bonanza will require a change in government. With regard to shale gas in Poland, I used to work for a large multi-national oil and gas company which drilled a number of exploratory wells into the Polish shale. We found the rock faulting troublesome and somewhat unpredictable, so the wells did not prove to be economical. Others may have better luck. I hope so, because the Poles deserve the good fortune.
Thanks for the info. When I evaluated the wells in Poland that you describe, I concluded they were in the wrong spot. Digging a little deeper I found that they were not allowed to flare gas during testing, so they were forced to drill near existing pipelines. If you've worked in shale, you know the importance of extended tests and location. We used to work with monthly cumulative production when doing our economics. So, it isn't just frac'ing, testing is important also. It's easy to stop shale developers with these silly rules.
One other factor to be considered: controllability. California has shown it becomes rather difficult (to put it mildly!) to reliably deliver electricity when renewables make up ~>25% of the mix. Australia also provides other examples (discussed several times on Climate Etc).
It is not clear what data you are relying upon to calculate the cost of wind and solar. Most LCOE analyses are incomplete as they do not take in to account the increased cost of transmission, intermittency, land use, and the necessity for backup systems. Read Idel, 2022 for a full discussion of these costs
A recent 2025 study by JP Morgan using EIA data puts things in perspective. If you add 100 MW of baseload i energy (fossil fuel, nuclear, hydro) to an ISO you get 100 MW of energy. However, if you add 100 of wind and solar to an ISO you get an effective increase of 5 to 18 MW, depending on the ISO and the wind/solar mix. that result in greatly increased cost.
Wind and solar are not bankrupting us. But the are making energy far more expensive The increased expense hits the poor the hardest. According to Nature (2018) 20% of the American public has had to choose between food and/or medicine and energy. Energy cost are the most regressive tax that exists, a fact lost on many renewable advocates who claim to have sympathy for those who are poor.
instead of its current cost of 20 cents/kWh in the West. The reason for that tragic. 7 fold difference is a misguided but all powerful regulatory system, You can read the full story and the solution at
Excellent commentary. One request - that you add biomass/bioenergy as one more category. Reason #1: biochar is clearly the leader in the 6-7 main CDR approaches
Reason #2: In many developing countries bioenergy is #1, even for electricity
Reason #3: In several Scandinavian countries, biomass is larger than several of your current six.
Reason #4: At one time, bioelectricity was larger even than coal, even in the USA
Reason #5: We should be concerned for replacing fossil fuels for thermal energy - not a PV/wind area
Biomass is the biggest scam going. It puts 9% more CO2 into the atmosphere than coal, in addition to other pollutants. In addition, there are only so many trees. A 1GW plant needs 58 sq km of trees every year (Smil, 2010). It takes 20 years to grow a tree. It takes 30 seconds to bun one to ash
Europe and the U.S. are being reforested to a large. This is one of the best things we can do to limit CO2 increases as plants consume CO2 and emit O2.
My problem with biochar as an energy source is that the creation of biochar and the subsequent creation of syngas (H2) from biochar are both endothermic reactions.. Therefore, it takes more energy to create the syngas than the syngas will yield.
You are only partly correct. All charcoal is made with energy release, not consumption. There is even a low temperature regime which is exothermic (runaway temperature increase). But (unfortunately) many biochar production units have to throw away the (still plentiful and valuable) energy available (up to 1000 o C) because there is no readily available user for that syngas (much more CO than H2). That char can only be called biochar if not burned - and way too much is burned. Biochar is valuable mainly because it is carbon negative (urgently needed to reduce our present huge excess of atmospheric CO2).
Roger, I suggest we parse use of the word "subsidies" with some nuance. Precise use of language is a great aid to clear thinking. According to my Funk & Wagnalls, a subsidy is "Pecuniary aid directly granted by government to an individual or commercial enterprise deemed productive of public benefit." Some of the government fingers thrust into the energy pie are indeed subsidies, but other "financial interventions" include loan guarantees and tax breaks. Renewable energy has been showered with government financial interventions at enormous rates compared to fossil fuels so to say that both receive "subsidies" is, in my opinion, misleading. Most of the financial interventions available to fossil fuels are tax breaks, not subsidies or loan guarantees. A tax break is whereby the government undertakes to steal slightly less of the enterprises' profits than otherwise. Robert Bryce's book "Power Hungry" calculated total financial intervention per million BTU equivalent for the entire US oil and gas industry as just $0.03 per million BTU. Natural gas-fired electricity received just $0.25 per MW-hr in financial interventions, again entirely tax breaks. By contrast, solar received $24/MW-hr, Wind received $23/MW-hr. (Bryce's numbers are getting long in the tooth, so they could use updating. But the relative ratios may still be useful.) Even nuclear, which has had a lot of government largess over the years, racked up just about $2/MW-hr of total financial interventions. These financial interventions, and the need for back-up power for intermittent renewables, should be front and center in any discussion of an energy transition.
I am intrigued by the long-term decline in Energy Expenditure Intensity since the 1980’s. It would be interesting to know if this decline could be partitioned between: 1) gains in energy consumption efficiency and 2) the structural shift from manufacturing towards a more service-based economy.
A great analysis and well written. Thanks
Roger -- "Claims that low-carbon energy is bankrupting the economy are not supported by this data." Not yet at least. What is missing is the investment required for wind and solar to assure system stability and reliability, an issue that has bene discussed at length in these posts. What is relevant to this analysis is those costs are non-linear -- modest at low penetration - largely the experience to date, increasing in a non-linear fashion as penetrations increase. Germany conducted a reality check because low-cost renewables have begun to impact the economy -- they are at a "crossroads" because system investments are beginning to become significant.
Finally, some empirically grounded energy journalism. Thank you Roger!
thank you Roger. However, here you are relying on incomplete data which obscures the reality of wind and solar. indirectly you are relying on LCOE, levelized cost of electricity, and not Full Cost of Electricity FCOE. The analysis woud look entirely different if you include the full cost. the reality is that wind and solar are the most expensive way to generatre 24/7/365 power... and they get more expensive the more you have. Wind and solar also increase the cost of coal and gas as those assets are being used less the efficiency declines
- reasons are based on low energy density, intermittency, and short operational lifetime
there is honestly no more doubt in energy economic circles that wind and solar increaes costs of providing a reliable grid and do so exponentially (it gets worse the more you have, Germany is the best real life example). Your analysis does not show that bc you are looking at only part of the cost of wind and solar.
therefore, i would honestly review the analysis and conclusion so you dont fall into the LCOE trap
some details here with all links, there is also a peer-reviewed paper on this from me
https://unpopular-truth.com/2025/11/30/the-problem-with-the-primary-energy-fallacy/
Schernikau, Dr Lars, William Smith, and Rosemary Prof. Falcon. “SSRN: Full Cost of Electricity ‘FCOE’ and Energy Returns ‘eROI.’” Journal of Management and Sustainability 12, no. 1 (2022): p96. https://doi.org/10.2139/ssrn.4000800.
Roger, I clicked through "How I use AI", expecting to find, well, how you use AI, for example to generate figures. Instead I found more of a "what I use AI for". If you find time to write up some examples, with the inputs, prompts, and optimization that produced your beautiful illustrations and figures, this subscriber would be grateful.
Great idea
The prompts are key and I am getting better at that
This statement is misleading: "In principle, as wind and solar costs continue to fall and their share of the grid grows,⁴ the utilization rates of fossil plants will decline, their per-unit fixed costs will rise, and the economic case for keeping them running will erode — and policy can create conditions that influence the rate of change."
Electric grid reliability requires power (KW), as well as energy (KWh). Physically, most power is provided by reliable and dispatchable generation, such as fossil or nuclear generation. Wind and solar (W/S) are neither dispatchable nor reliable. So W/S must be backed up by reliable and dispatchable generation or by reliable and dispatchable stored energy.
Backup battery storage for W/S, in the total absence of backup fossil, stored hydro, and nuclear generation, is prohibitively expensive because the required battery capacity for year-round backup is massive -- typically around a three-month supply of energy stored in high W/S output months to be released in low output months. That's because W/S output is seasonal, with much reduced output in the cooler months. That also means that the W/S system peak capacity must be considerably greater than the system peak demand to support battery charging without compromising on-peak grid reliability.
Increasing utilization of W/S on a grid does, as stated, reduce the utilization rate of fossil-generating plants and increase the per-unit cost of fossil generation. But W/S installation also drives up the total cost of electric energy to consumers because adding W/S increases the system capital cost to provide W/S and related new transmission, without adding reliable power, which would allow reducing the capital cost of backup storage and generation.
For example, electricity costs have tripled in California (where I live) over the past three decades because California legislation has driven rapid increases in the use of W/S energy. The current annual rate of electricity price increase in California is 13%/year. And that's before the federal subsidies for W/S installations have fully expired.
Anyone can confirm that W/S is not economically competitive by noting that W/S must be supported by subsidies and/or by state legislative preferences for W/S over fossil fuels.
So essentially what you are describing is future energy growth would come from zero carbon sources. A simplistic interpretation, but I think accurate. And this won’t happen unless there is heavy handed government involvement.
A real life example is where Europe has gone with their energy infrastructure. Their move in this direction was due to heavy handed government involvement. Look at what it has done with their economies.
Can’t say this is very appealing.
Request clarification:
1. Gasoline includes diesel fuel? And I expect LNG cars/trucks are too small a market, but where is their contribution captured?
2. How is residential solar (and light commercial solar that acts like residential) consumption calculated? The power, in most applications, goes both to immediate use as well as back to the power grid. And some is directly charging an EV car. It's the non-grid part that is not metered/captured in any meaningful way. And how is the meager purchase price provided by the power grid for excess solar power captured?
Under the original concept of net metering, residential solar customers received the full retail price for excess power provided to the grid, leaving the capital and transmission costs of supporting solar customers to be paid by non-solar customers. Recently, utilities have begun to move toward paying the wholesale power value, which may be zero at times when the local grid is oversupplied.
There's a lot of information here but not sure where it all leads. One thing that jumps out at me is $100/BBL oil in 2026 is far from the same thing as $100/BBL oil in the 1970s and '80s. LNG and extensive fracking for gas is serving us (the USA) well in today's world.
It's difficult to not look at this post in the context of what's going on in the Middle East right now, but you've already said that you want to keep the 2 separate. Not sure why, but like I said before it's your Substack.
As you write this is an extremely complex subject and very hard to unwind. It defies analysis because of multiple "what ifs." I will just point out a couple of them:
If transitioning from fossil fuels is desirable, why are so many energy intensive European companies (from countries where net zero is a priority) moving to Texas? Examples: BASF, OCI, Linde, TotalEnergies, ArcelorMittal, among hundreds of others. They cite energy costs as a reason for the move.
The problem with just working with U.S. numbers is that energy users move where energy is cheapest and, since 2008, energy costs in the U.S. have fallen rapidly. The real energy game changer is shale gas and oil, not wind and solar. Having studied shale gas and oil potential in the UK, France, and Poland, I'm still amazed that they have done nothing to develop their considerable resources. The longer they delay, the worse it is for them.
It's hard to see the reason or mechanics of a change when the change is happening.
Dear Mr. May, In the English Midlands there is a geological formation of shale rock which is estimated to contain AT LEAST 822 trillion cubic feet (tcf) of natural gas. The UK uses about 3.3 tcf of nat-gas per year. Yet the Midlands shale cannot be exploited because hysterical protests from green zealots persuaded the UK government to limit earth tremors from hydraulic fracturing to less than 0.5 on the Richter scale. A commercial truck driving by your house will generate a 0.5 Richter tremor! So the Midlands shale slumbers untapped while the British pay four times what we do for electricity. Exploiting this bonanza will require a change in government. With regard to shale gas in Poland, I used to work for a large multi-national oil and gas company which drilled a number of exploratory wells into the Polish shale. We found the rock faulting troublesome and somewhat unpredictable, so the wells did not prove to be economical. Others may have better luck. I hope so, because the Poles deserve the good fortune.
Hi Dale and Laura,
Thanks for the info. When I evaluated the wells in Poland that you describe, I concluded they were in the wrong spot. Digging a little deeper I found that they were not allowed to flare gas during testing, so they were forced to drill near existing pipelines. If you've worked in shale, you know the importance of extended tests and location. We used to work with monthly cumulative production when doing our economics. So, it isn't just frac'ing, testing is important also. It's easy to stop shale developers with these silly rules.
One other factor to be considered: controllability. California has shown it becomes rather difficult (to put it mildly!) to reliably deliver electricity when renewables make up ~>25% of the mix. Australia also provides other examples (discussed several times on Climate Etc).
It is not clear what data you are relying upon to calculate the cost of wind and solar. Most LCOE analyses are incomplete as they do not take in to account the increased cost of transmission, intermittency, land use, and the necessity for backup systems. Read Idel, 2022 for a full discussion of these costs
https://www.sciencedirect.com/science/article/abs/pii/S0360544222018035
A recent 2025 study by JP Morgan using EIA data puts things in perspective. If you add 100 MW of baseload i energy (fossil fuel, nuclear, hydro) to an ISO you get 100 MW of energy. However, if you add 100 of wind and solar to an ISO you get an effective increase of 5 to 18 MW, depending on the ISO and the wind/solar mix. that result in greatly increased cost.
https://assets.jpmprivatebank.com/content/dam/jpm-pb-aem/global/en/documents/eotm/heliocentrism.pdf
Wind and solar are not bankrupting us. But the are making energy far more expensive The increased expense hits the poor the hardest. According to Nature (2018) 20% of the American public has had to choose between food and/or medicine and energy. Energy cost are the most regressive tax that exists, a fact lost on many renewable advocates who claim to have sympathy for those who are poor.
The only way forward is nuclear at or near it's can, did, and should-cost of 3 cents/kWh. Pls see
https://gordianknotbook.com/download/nuclear-power-not-only-should-be-cheap-it-was-cheap-3-cents-kwh-cheap/
instead of its current cost of 20 cents/kWh in the West. The reason for that tragic. 7 fold difference is a misguided but all powerful regulatory system, You can read the full story and the solution at
https://gordianknotbook.com/download/how-we-can-make-nuclear-cheap-again/
For those who cannot to afford the time to read a 120 page book, go to the GKN site directory
https://jackdevanney.substack.com/p/site-directory
scroll down to Lecture Series and work your way through the slide decks in order.
Jack
Excellent commentary. One request - that you add biomass/bioenergy as one more category. Reason #1: biochar is clearly the leader in the 6-7 main CDR approaches
Reason #2: In many developing countries bioenergy is #1, even for electricity
Reason #3: In several Scandinavian countries, biomass is larger than several of your current six.
Reason #4: At one time, bioelectricity was larger even than coal, even in the USA
Reason #5: We should be concerned for replacing fossil fuels for thermal energy - not a PV/wind area
Biomass is the biggest scam going. It puts 9% more CO2 into the atmosphere than coal, in addition to other pollutants. In addition, there are only so many trees. A 1GW plant needs 58 sq km of trees every year (Smil, 2010). It takes 20 years to grow a tree. It takes 30 seconds to bun one to ash
Europe and the U.S. are being reforested to a large. This is one of the best things we can do to limit CO2 increases as plants consume CO2 and emit O2.
Jory: Agree with about half your comments. (Pyrolysis never is accomplished in 30 seconds)
My comments were about biochar and bioenergy, - not biomass nor trees.
Your thoughts on the benefit/need for Roger to comment now on biochar - now CDR's US and global leader?
My problem with biochar as an energy source is that the creation of biochar and the subsequent creation of syngas (H2) from biochar are both endothermic reactions.. Therefore, it takes more energy to create the syngas than the syngas will yield.
You are only partly correct. All charcoal is made with energy release, not consumption. There is even a low temperature regime which is exothermic (runaway temperature increase). But (unfortunately) many biochar production units have to throw away the (still plentiful and valuable) energy available (up to 1000 o C) because there is no readily available user for that syngas (much more CO than H2). That char can only be called biochar if not burned - and way too much is burned. Biochar is valuable mainly because it is carbon negative (urgently needed to reduce our present huge excess of atmospheric CO2).
Roger, I suggest we parse use of the word "subsidies" with some nuance. Precise use of language is a great aid to clear thinking. According to my Funk & Wagnalls, a subsidy is "Pecuniary aid directly granted by government to an individual or commercial enterprise deemed productive of public benefit." Some of the government fingers thrust into the energy pie are indeed subsidies, but other "financial interventions" include loan guarantees and tax breaks. Renewable energy has been showered with government financial interventions at enormous rates compared to fossil fuels so to say that both receive "subsidies" is, in my opinion, misleading. Most of the financial interventions available to fossil fuels are tax breaks, not subsidies or loan guarantees. A tax break is whereby the government undertakes to steal slightly less of the enterprises' profits than otherwise. Robert Bryce's book "Power Hungry" calculated total financial intervention per million BTU equivalent for the entire US oil and gas industry as just $0.03 per million BTU. Natural gas-fired electricity received just $0.25 per MW-hr in financial interventions, again entirely tax breaks. By contrast, solar received $24/MW-hr, Wind received $23/MW-hr. (Bryce's numbers are getting long in the tooth, so they could use updating. But the relative ratios may still be useful.) Even nuclear, which has had a lot of government largess over the years, racked up just about $2/MW-hr of total financial interventions. These financial interventions, and the need for back-up power for intermittent renewables, should be front and center in any discussion of an energy transition.
Good stuff ... And yes, how economists define subsidies is also different, and broader as well. I may one day venture into this thicket . . .
I am intrigued by the long-term decline in Energy Expenditure Intensity since the 1980’s. It would be interesting to know if this decline could be partitioned between: 1) gains in energy consumption efficiency and 2) the structural shift from manufacturing towards a more service-based economy.
Excellent question and the available data indeed allows this apportionment. Would take some work though.
As a follow on, if manufacturing picks back up (as the current Administration expects) then how does that impact the trend?