A recurring theme here at Manhattan Contrarian is that the “smart” people who seek to run the world are not really very smart. They may have gotten high scores on the SATs, and they may have attended fancy universities, but when it comes to practical knowledge of how the world works they are often complete idiots.

A special case of this phenomenon is that the highest gurus of high finance — the people who are most trusted to have mastered basic numeracy, and who get to pass out trillions of dollars of public funds — are completely innumerate.

I come to this issue today as a result of the recently-completed briefing in CHECC v. EPA, the DC Circuit case challenging EPA’s “finding” that atmospheric CO2 is a “danger to human health and welfare.” The group challenging the Endangerment Finding, the Concerned Household Electricity Consumers Council, asserts standing on the ground that increasing the amount of solar and wind “renewable” generation on the grid necessarily drives up consumer electricity bills.

The reasons why this is so have been discussed many times on this blog. Perhaps the most detailed discussion appears in the Articles section, titled “The Disastrous Economics Of Trying To Power an Electrical Grid With 100% Intermittent Renewables.” This subject does require some thought to understand, but certainly no advanced math. The main point is that intermittent renewables cannot power a grid on their own, and as their grid penetration increases, large amounts of some combination of backup, storage, and overbuilding are required, all of which add to the cost of the system. All of this is easily demonstrated with basic arithmetic. Anyone who successfully finished the sixth grade should grasp it immediately.

As obvious as the conclusion of increasing electricity prices may be, our government, represented by EPA and the Justice Department, either claims, or pretends, not to recognize that conclusion. Could seemingly smart people really be so dense?

Well, consider the case of the IMF, the International Monetary Fund. These are the people at the top of the knowledge pyramid of international finance. They get hundreds of billions of dollars of funding from governments in developed countries, and are given the authority to hand out those funds, let alone to educate and instruct governments in developing countries how to run their economies and their monetary policies correctly. This monetary policy stuff is all arithmetic, some of it fairly complicated. Surely, if anyone in the world can do basic arithmetic, these are the people.

So consider the piece from the IMF’s online journal Finance & Development by Bob Keefe, from December 2022, titled “The Price of Energy Insecurity.” According to this guy, wind and solar are the obvious route to inexpensive electricity:

[T]hanks to previous policies and the advance of technology, solar and wind are the cheapest sources of power available in most parts of the world. Electric vehicles are cheaper to operate, especially when gas prices soar. Energy-efficient products—LED lighting, high-efficiency heat pumps and hot water heaters, and better windows and insulation—can save consumers and businesses money with every monthly power bill. And making clean energy at home, from fuel that’s free for the taking, makes a nation more secure.

And it’s not just Keefe and the IMF who have gotten the message. EU Commission President Ursula von der Leyen is fully on board:

“Ending our dependency on Russian fossil fuels is only the first step,” [von der Leyen] said at the Bled Strategic Forum in Slovenia. “The skyrocketing electricity prices are now exposing, for different reasons, the limitations of our current electricity market design. It was developed under completely different circumstances and for completely different purposes. It is no longer fit for purpose.”

And don’t forget about the World Bank, the IMF’s partners in global high finance. From the World Bank’s “Energy” page, September 26, 2022:

Renewables Are the Key to Green, Secure, Affordable Energy. Renewable energy can help countries mitigate climate change, build resilience to volatile prices, and lower energy costs—this is especially critical now as spiking fossil fuel costs are debilitating poor energy importing countries.  Solar and wind technologies can become a game changer for many developing countries as solar and wind are abundant, cost-competitive, and a source of reliable power when combined with battery storage.

Or, from the UN’s International Renewable Energy Agency, July 13, 2022:

“Renewable Power Generation Costs in 2021,” published by the International Renewable Energy Agency (IRENA) today, shows that almost two-thirds or 163 gigawatts (GW) of newly installed renewable power in 2021 had lower costs than the world’s cheapest coal-fired option in the G20. IRENA estimates that, given the current high fossil fuel prices, the renewable power added in 2021 saves around USD 55 billion from global energy generation costs in 2022.

So what is happening in the real world? A guy named Mike Jonas at Watts Up With That yesterday has compiled the latest data that he could find on the relationship between wind and solar penetration in primary energy consumption in a country versus consumer electricity prices. The wind/solar generation percent data come from 2021; the consumer electricity prices are from June 2022. Here is the chart: