by Save money while helping protect the world from climate change and defeating Vladimir Putin’s wickedness – what’s not to love about the green transition? Well, quite a lot turns out.
On the face of it, there is no objection to trying to reduce the carbon emissions of our homes, cars and lifestyles if possible. Those efforts can actually go a long way in the back pocket in some cases, especially if the state subsidizes the high initial cost.
Rooftop solar panels have saved consumers hundreds of pounds a year as gas and other domestic heating options have become more expensive, while electric vehicles are estimated to save motorists up to £800 a year compared to consuming fossil fuel alternatives.
But supporters (and producers) of green technology should not pretend that there are only benefits. For the first time ever, our society is trying to make “progress” by embracing less efficient and productive technology.
So far, human history has been an impressive arc of discovering better and more efficient ways to generate energy. But the green revolution, to save the planet, will mean that our short-term future will be based on less effective production.
Contrary to what some may say, significant trade-offs will result from this. Many consumers may not really notice, either because the “unit cost” of these trade-offs has no monetary value, or because the cost appears to be separate from the green transition.
Let’s start with the tradeoffs you’ll actually notice. With many new technologies, costs are not input, but time or availability. While electric cars can be charged at home, potential buyers should also be aware that refueling is not just five minutes away from services.
Instead, it represents a time investment of at least 40 minutes, and that assumes you have immediate access to a 43kW fast charger when you arrive to charge your vehicle.
Also with solar panels, the monthly savings on your total energy bill must be put in addition to the (obvious) fact that solar panels only work during periods when the sun is shining.
This means that while you can take advantage of almost unlimited energy during periods of light, nights and low light winter days (when you need heat and light the most) you are again at the mercy of the national grid.
Again, solar panels have their advantages. But when you also factor in the high up-front installation costs, the costs and benefits need to be weighed sensibly: the most common household size is a 4kW solar panel system, which comes with a price tag of £6,000 (and will take around 29 square meters of roof) .
And as has been well documented recently, heat pumps also have costs, both in terms of time and effectiveness. Heat pumps operate at lower power than their gas-fired equivalents, which means they generate heat more slowly and at a lower level (i.e. cooler hot water).
Again, this is hardly a catastrophe. But once you factor in the fact that your solar panels probably won’t provide power for the longer periods of time you need the heat pump, users shouldn’t expect their energy bills to be converted by them.
Then there’s the global supply chain issues that you’re likely to see only in higher costs of electricity or other high-tech products.
Switching the UK fleet to full electric power and shifting 100% of domestic heating from oil and gas to heat pumps will increase national energy demand from 279 terawatt hours a year to over 500, an 81% increase.
If we were to do this with renewable energy alone, we would need to more than double the number of wind turbines in Britain to cover the additional energy consumption of electric vehicles and heat pumps.
Unfortunately, the production of many green energy products (such as electric vehicles and solar panels) also requires huge amounts of rare and expensive minerals.
For example, if we wanted all 31.5 million UK cars to be electric by 2050, the UK would need to buy the equivalent of the world’s entire supply of cobalt for two years, not to mention six months’ worth of copper. And that’s before we factor in years of global copper production to build the 6,000 additional turbines it will take to power them.
Such demand for these minerals will drive up the price, making the initial cost of green energy more expensive. But it will also drive up the price of other goods that use these minerals, especially electronics, household plumbing and wiring.
As the world quickly embarks on a green transition path, you should expect items like cell phones, computers, and cars to all increase in price as the minerals that make them up.
None of this is a definitive projection. After all, the discovery of new mineral deposits or a technological leap forward can radically change the long-term cost of green energy. But those who want to ride the wave of new green technology should at least be aware that no decision is free.
Sam Collins is a senior policy advisor at the Institute of Economic Affairs
