
GE bet on fossil fuels and lost $200B misjudging renewable energy transition - woodandsteel
https://electrek.co/2019/06/06/ge-renewable-energy-transition/
======
southern_cross
The "lost $200B" refers to market value (capitalization), which these days is
mostly smoke and mirrors anyway - so not actual losses in a "profit and loss"
kind of way. Also, other articles have gone into great detail about how GE's
good numbers over recent years-to-decades have largely been the result of
financial engineering anyway, and eventually that kind of thing catches up
with you, so matter how well your individual business divisions are actually
doing. Problems in their energy division may have very well been the straw
that broke the camel's back, though.

~~~
woodandsteel
You are correct that this is only cap value. However, it reflects management
decisions that have put GE in a poor position to compete commercially in the
new world of renewable energy. The key question is if GE will be able to get
back on course fast enough.

The larger issue is that renewable energy is not just some impractical idea
the tree-huggers came up with that is of no importance to serious investors
and businesses. Now it is for real. For some evidence, do a google search on
fossil fuels stranded assets.

~~~
southern_cross
I'm probably far more well-informed on the matter of renewables that you are.
And I just read another article on so-called stranded assets and such, one
which (IIRC) called out Shell as being a "leader" in moving away from fossil
fuels, but which I interpreted as "Shell probably won't be around too much
longer".

Fun facts about renewables which most people are pretty clueless about:

1\. "Nameplate capacity" (the amount of energy produced under ideal
conditions, which is what is always quoted in the press) is not at all the
same as "actual average capacity", which as a rule of thumb may typically only
be 25% of nameplate, give or take.

2\. Storage capacity (battery, pumped hydro, etc.) is not at all the same as
actual generating capacity, although the renewables folks like to conflate the
two.

3\. Actual hydropower was generally considered evil ("Because dams are bad!")
until the renewables folks decided to make it their own, in order to make
their numbers look better than they actually would be otherwise.

4\. Individual windmills are apparently only going to last about half of their
originally expected lifetimes - 10 to 15 years instead of 20 to 30 years. Not
sure about solar, but I think that's generally holding up much better.

5\. On the other hand, solar doesn't necessarily generate as much power as
expected, even in "ideal" areas like deserts, due to dust accumulation on
panels and such. Even Google infamously overestimated the generation capacity
of at least one of its desert solar thermal towers by something like 2/3,
based on estimated cloud cover vs. actual cloud cover. (How does something
like that even happen?) And apparently a lot of solar panels which have
already been installed were oriented the wrong way. That is, due South (as was
originally the thinking) instead of due West, which is what the "duck curve"
indicates is actually the best orientation.

I could go on, but that seems sufficient.

BTW, GE's troubles date back to at least the heyday of GM Financial, which is
well before the whole current energy thing had any traction. Apparently it was
routinely being used as something of slush fund in order to gloss over
problems elsewhere. (This was an open secret within the financial community
and even occasionally joked about in the financial press.) And IIRC, there
are/were several billion dollars of future potential insurance liabilities
which somehow just conveniently got "forgotten about" at one point. Oops!

~~~
woodandsteel
I want to ask you about something.

But first I want to say that renewable energy is immensely more practical than
it was a decade ago, and it is going to continue to improve. Beyond that,
there are strong forces pushing its adoption. Besides global climate change,
there is air pollution and the desire of many countries to become independent
of expensive fossil fuel imports.

My question to you is what is your view of anthropogenic global climate
change? Do you think it is a hoax or real and a grave danger? And if the
latter, then what do you think should be done?

~~~
southern_cross
Renewables are probably going to "run out of steam", so to speak (that's a
little bit of geothermal humor there) far sooner than most proponents think,
for a variety of reasons. If you're well-informed on these matters then you
already know what I'm talking about. But like so many other things these days,
what you generally see in the press and on proponents' web sites is often full
of lies and half-truths, so you have to be careful to try and look past those.

I understand that renewables costs and storage costs have declined
dramatically lately and will probably continue to do so at least for a while
longer, but that's only half the story. There are subsidy issues and premature
end-of-life issues and reliability/deliverability/supply-demand issues and so
on. But the biggest issue has to do with that 25% thing, where in reality
you're potentially going to have to massively overbuild your wind and solar if
you expect those to deliver as promised.(1) And even then you're probably
going to have to deal with storage costs, too, be that battery or pumped hydro
or whatever. So any claims that renewables are "super cheap" (cheaper than
existing power-generating facilities) right now are basically bogus, if you
look at the overall picture. Renewables still have a long way to go to fulfill
their promises, in other words, if they ever actually even come close to doing
so. I could give you local, real-world examples of this stuff if you want, but
I don't want to bore you.

Even if you run with the theory that existing power plants can (and maybe
should _only_ ) be used intermittently as backups for renewables when those
can't deliver, now you have another economic problem because that probably
puts you back into "peaking rates" territory, and those rates are generally
hugely expensive. And you'd have to add those onto the costs of the renewables
themselves.

To sum up, though, whenever you see a claim that a solar plant or whatever can
produce X megawatts at a very low Y cents per KWH, the reality is going to be
more like it can only provide a fraction of those megawatts and only at a
multiple of those cents per KWH, if it can actually reliably produce much
power on a fairly continuous basis at all. Overall you'd probably be much
better off to go with more nuclear, but nuclear is still a bad word to a lot
of people these days. (Fun fact: One reason why we have so much fossil-fueled
power these days to begin with is because there was so much opposition to
nuclear back in the day, mostly by the same type of folks who are so opposed
to fossil fuels today.)

As to anthropogenic global climate change, I think they're making a mountain
out of a molehill. There's a whole lot of pertinent stuff that they frankly
just choose to ignore, and they've somehow become overly fixated on CO2 as the
end-all, be-all of what controls the climate. (This over-fixation notion is
not completely true but it's true enough.) And to that end they now point
their guns at the fossil fuel companies as evil incarnate, when the truth is
more like they're just deep pockets in their eyes. Also, an awful lot of the
"data" that they're using to make those claims and produce those dire
predictions is mostly just made up, or has other major problems with it. Once
again, I could give you local, real-world examples of this stuff if you want.

Now let me ask you something. Do I have to be a "true believer" in the Church
of Climate Change for you to give any credence to what I have to say about
these things?

(1) Here is the only article that I ever recall seeing (at least in recent
memory) that directly addresses the overbuilding issue. And it, of course,
tries to put a positive spin on the whole thing.

[https://www.latimes.com/business/la-fi-solar-batteries-
renew...](https://www.latimes.com/business/la-fi-solar-batteries-renewable-
energy-california-20190605-story.html)

~~~
woodandsteel
Regarding nuclear, I would love to see one of the new technologies catch on,
but there is no way to know at present if and when that might happen.

Regarding global climate change, I am quite persuaded it is happening and will
have quite destructive consequences. I asked what you believe there because I
think those who doubt it are ill-informed and biased, and so I doubt their
arguments on renewables.

Let me add that among those who disagree that it is urgent we reduce carbon
emissions, there is a whole range of positions. These include: the climate is
not getting warmer, it might be getting warmer but we don't know, it is
getting warmer but we don't know why, it is getting warmer but it has some
other cause than carbon emissions, it is getting warmer due to carbon
emissions but this is beneficial, not harmful, or it is neither harmful nor
beneficial, or it is only mildly harmful. So let me ask what is your
particular position, and why do you think the people who hold the other
positions I have listed go wrong, like are they ill-informed, or irrational,
or motivated by special interests, or what?

I agree with you that in considering the price of renewable energy
electricity, you have to add in more than just the production it self,
including the need for over-building. But those costs are continuing to fall.

On the idea of renewables losing steam, are you saying that all the nations
that are pushing it due to concern over global climate change plus the other
motives I mention, are going to at some point, say in a decade or so,
completely reverse course and go back to fossil fuels? Like they will decide
that no, the climate is not getting warmer, or it is not due to fossil fuels,
or it is not as bad as everyone thought? I am not asking if they should, I am
asking if you predict they will.

~~~
southern_cross
> I asked what you believe there because I think those who doubt it are ill-
> informed and biased, and so I doubt their arguments on renewables.

For someone who has no real skin in the game (I'm a computer nerd, data-
handling guy by training and trade), I'm probably one of the most well-
informed and unbiased folks (at least of my type) out there on the subject of
climate change. I've been following it on and off ever since great "Global
Cooling" scare the of the 1970s, back when I was just a kid. And, seeing what
I've seen out there and knowing what I know now, on any given day lately I'm
tempted to just chuck the whole concept of anthropogenic climate change out
the window. But then I back off on that because that's probably taking things
too far.

As far as where I my own thoughts fall on the subject, I would probably best
be described as a "lukewarmer", to borrow that term. I believe that the
climate has warmed lately, but not nearly as much as is being claimed. That
this warming is largely natural and cyclical, and that while man may very well
be playing a role in it, his influence on it is not nearly as dramatic as is
being claimed. And that to the extent that man _does_ play a role here, this
goes beyond any effects that CO2 emissions themselves may have on the
situation. It's not just all about the CO2, in other words, and it may in fact
have very little to do with CO2.

As to where things go wrong, the first problem probably has to do with the
fact that an awful lot of the climate-related "data" being bandied about is
basically just made up. (I'm not kidding here; you would probably be as
appalled as I was to find out the details.) And what isn't just made up is
often of remarkably low quality.

So there really isn't enough quality data at all, at least not at the present
time, to justify making "the sky is falling" pronouncements. But these keep
being made anyway, by people who should probably know better, or who at least
fall somewhere on the spectrum between ill-informed and plain old dishonest.
And I can tell you that from what I've seen lately, an awful lot of the folks
who are falling for this stuff hook, line, and sinker - and at least some of
the folks who are saying it, too - can probably best be described as
irrational.

Along those lines, James Hansen, one of the Grand Old Men of climate change
science, has of late taken to saying and doing things which make even his own
acolytes take pause. But that doesn't stop his name from showing up on
research papers such as the following. (I have a lot to say about that paper,
too; maybe later.)

[https://agupubs.onlinelibrary.wiley.com/doi/pdf/10.1029/2018...](https://agupubs.onlinelibrary.wiley.com/doi/pdf/10.1029/2018JD029522)

And then you have Greta Thunberg, the sixteen-year-old autistic Swedish
schoolgirl who of late has been held up as something of an activist paragon in
the climate change community. But now that her mother has claimed (or so it
would appear) that young Greta can "see" CO2 in the air with her naked eyes (I
presume this means all 400ppm, or 0.04%, of it), based on the outrageousness
of such a statement I expect that we probably won't be hearing or seeing much
more from or about young Greta.

As for the future of wind and solar, I don't necessarily expect that they're
just going to be abandoned or anything, but I also don't expect that they are
ever going to come close to living up to the promises which are being made for
them, both physically and economically. Much like coal plants today, I expect
that as they reach the end of their useful lives they probably won't just be
automatically replaced with like kind, but rather with something else,
whatever that may be - probably natural gas, maybe even nuclear. (Once again I
can give you local, real-world examples of this type of thing if you want.)

~~~
woodandsteel
>I believe that the climate has warmed lately, but not nearly as much as is
being claimed. That this warming is largely natural and cyclical, and that
while man may very well be playing a role in it, his influence on it is not
nearly as dramatic as is being claimed.

Are there any sorts of future developments, either in temperature or new
scientific research, that could persuade you either of those ideas is mistaken
and the anthropogenic global climate change danger position is correct?

~~~
southern_cross
Are there any sorts of future developments, either in temperature or new
scientific research, that could persuade YOU either of those ideas is NOT
mistaken and the anthropogenic global climate change danger position is NOT
correct?

I'm flipping your question on its head because almost always in these types of
discussions people accuse me of being ill-informed, then start throwing papers
and such at me. But in almost all cases I've already read those things. (I do
go ahead and read the ones that are new to me.) But when I ask them to do the
same - to look at claims being made from the other side of the story - they
usually just outright refuse. Apparently doing such a thing is beneath them,
and there's no need for them to do so anyway because they've already made up
their minds and have no intention of changing their position, no matter what.

Often though, the truth of the matter seems to be more like they haven't
actually read the stuff they're throwing my way themselves, and probably
couldn't really understand it if they did, so of course they're going to
refuse anything I suggest. It's amusing to try and discuss the whole situation
with them, which they try to pretend they are well-informed on, and then
realize that they are generally clueless and that they're mostly just falling
in line with whatever is showing up in the news - the clickbait headlines and
such.

Case in point: Once, during a discussion about satellite observations, I made
an educated guess as to how those observations were being made. But then
someone called me ill-informed about it and threw a couple of papers my way.
And when I read those papers, (surprise surprise) they said pretty much
exactly what I'd said myself. When I pointed this out to the person who was
giving me grief, it became obvious that they hadn't actually read those papers
before hurling them at me. I told them that I would gladly delay further
discussion on the matter while they went ahead and did that, but all I got
back from that offer was pretty much just dead air.

To actually answer your question, though, they could start by using higher
quality data, and stop screwing around so much with what data they do have.
Unfortunately quality data only really goes back a few decades, if that, and
it may be a few more decades yet before there's enough such data to be able to
make any decent pronouncements from it. And until that happens I'm not really
willing to give them the benefit of the doubt, especially when they go around
claiming "the sky is falling" on quite flimsy evidence. I mean, if they
instead said something like "We really don't have enough data to back it up
yet, but from what we do have we think we see some potentially disconcerting
trends. We're generally going to have to take a wait-and-see attitude, but it
wouldn't hurt to start making some contingency plans beginning right now and
also maybe some basic changes here and there.", then I consider that an honest
statement that I could generally get behind.

~~~
woodandsteel
>Are there any sorts of future developments, either in temperature or new
scientific research, that could persuade YOU either of those ideas is NOT
mistaken and the anthropogenic global climate change danger position is NOT
correct?

yes, if the temperature dropped back to where it was a few decades ago, and
stayed there.

I have not read nearly as much as you have on this matter, and I am not going
to, in part because I have so many other things to research.

However, I am very well informed on political philosophy, and the critics of
the GCC idea are mostly or all conservatives who have the general belief that
it is impossible for human action to ever cause change in the environment that
in turn causes significant harm to human beings. In effect they believe that
God child-proofed the universe so that an unregulated free market would only
benefit the human race. I consider that belief highly irrational (and let me
add that I also think liberals are quite irrational on some important topics).

So let me ask you what is your political philosophy? and do you think that
humans can cause significant harm to the environment that needs to be
regulated by the government, and has this happened in the past?

Also, what do you think of ocean acidification?

~~~
southern_cross
> yes, if the temperature dropped back to where it was a few decades ago, and
> stayed there.

Well, it may very well head back that way yet. (There are even some hints that
this process may have already started, but it's far too soon yet to really
tell.) But it may not go all the way back down to prior levels, nor would I
necessarily expect it to stay there even if it did.

Remember that temperatures where relatively high during the 1930s, dropped to
a relative low point during the 1970s ("Global Cooling"), and have since
headed back up again. And all of this occurred while we were coming out of the
Little Ice Age, which has led to a general overall warming trend over the past
150 years or so. Before that temperatures were relatively warm, maybe even as
warm if not warmer than now, at least according to some.

So natural warming/cooling cycles, even on relatively short timeframes, are
very real; the question is how much influence man is having on them. But be
they natural, anthropogenic, or somewhere in-between, such cycles can
certainly potentially be quite inconvenient for us, and perhaps even
dangerous. They can also potentially be quite beneficial.

> GCC idea are mostly or all conservatives ... God child-proofed the universe

I think you're painting folks with too broad a brush there. I, for example, am
just about as far from religious as you can get, and on any given day
politically I might swing liberal or conservative, depending on the issue at
hand. (I'm a bit of a wildcard, in other words.) And when it comes to voting,
a candidate's political affiliation is often the last thing I consider,
although I've noted that in my younger days I tended to vote more Republican
while these days I tend to vote more Democrat or even Independent. Sometimes
it's been a matter of noting which party has been acting more "cray cray" at
the time and then maybe actively voting for more folks from the other party!

> do you think that humans can cause significant harm to the environment that
> needs to be regulated by the government, and has this happened in the past?

Harm? Regulated? Happened in the past? Yes, of course, to all of those. But
sometimes regulation tends to go too far if left unchecked, so it has to be
reined in a bit. The EPA has done wonderful things in the past, and still has
work to do, certainly. But, for example, lately they have become fixated on
something called "PM 2.5" (fine particulate matter), and have been looking for
ways to regulate it. Except that it turns out the highest exposure you
generally get from this comes from places like your own kitchen. So what are
they going to do, ban frying pans and such? Sounds ridiculous, I know, but
left to their own devices they might very well head down a path like that.

And remember the Gold King Mine spill a few years back, where the EPA caused a
massive release of pollution into the Animas River watershed? When I first
read about that I thought "What bad luck! All of the planning that I'm sure
the EPA put into that project, only to have it blow up in their faces like
that." But then after I read the actual details of that accident and what led
up to it, I was like "WTF? The EPA shouldn't have gone anywhere near that mine
to begin with!"

> Also, what do you think of ocean acidification?

Funny you should mention that. Knowing that CO2 dissolved in water forms
carbonic acid, this was actually one of the things I started being concerned
about myself, well before it was even being mentioned generally. But now that
I know more about the situation I'm not particularly concerned at all.

Why? Well for one the oceans are generally alkaline, so it would take an awful
lot for them to become generally acidic, which is what the term
"acidification" implies. For another, I don't know how much I trust claims
that the ocean has already decreased by 0.1 pH over a period of 150 years or
so, knowing that they had to depend on proxies and a lot of educated guesswork
in order to make such a claim. Even assuming that it's true, the change hasn't
exactly turned the oceans into a lifeless deserts, has it? Meanwhile things
like overfishing and pollution and such seem to be taking a much greater toll.

And the oceans, being quite dynamic places, have waters which routinely
already go through short-term, cyclical changes in pH, temperature, salinity,
and so on - generally much greater changes and on a much shorter time scale
than what you could blame on CO2 and climate change. But the living things in
the ocean long ago adapted to those fast changes in various ways (which
includes potentially moving along to places more to their liking), so I don't
think that a slow and steady but relatively small change in overall pH is
going to hurt them much.

I once saw a discussion by someone much more knowledgable about ocean
chemistry than I am, and he pointed out that while dissolving CO2 in fresh
water certainly yields considerable carbonic acid, in ocean water it's a
different story. That there are plenty of other things already in ocean water
that work against the formation of much of that carbonic acid to begin with,
or at least work towards neutralizing much of it when it does form. (I don't
know how much you know about chemistry, but IIRC the discussion revolved
around a concept similar to buffering, although as I recall it was a bit more
complicated than that.) So once again this "the sky is falling" ocean
acidification argument just doesn't seem to hold much water.

There's a lot more that I could say here, including some anecdotes related to
the papers and such which I've looked at concerning the situation, but I will
stop for now.

------
danans
Interesting to note the timing of the start of their stock decline (starting
in late 2016)[1] and their bet on increased demand for fossil fuel based
generation equipment.

It's almost as if they thought the current US administration would be able to
stem or reverse the tide of the economics shifting towards favoring
renewables.

1\. From the original article: [http://ieefa.org/ieefa-report-ge-made-a-
massive-bet-on-the-f...](http://ieefa.org/ieefa-report-ge-made-a-massive-bet-
on-the-future-of-natural-gas-and-thermal-coal-and-lost/)

