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An internationally renowned investment bank and financial services company based in New York City has acknowledged the downside of renewable energy dependence, as more organizations look to transition away from fossil fuels and toward green energy.
Texas has led the nation in renewable energy production for a long time, but a slide from a Goldman Sachs Asset Management presentation from April noted that "renewables are not a stand-alone solution."
"Renewables alone can't satisfy the world's energy needs due to intermittency issues, hidden costs and potential geopolitical considerations," the slide stated.
On the intermittency issue, Goldman Sachs pointed out that solar and wind energy are inherently variable because weather changes affect how much and when energy is produced. The firm also cautioned that batteries at scale are not economically feasible, and even if they were, fossil fuel generation would still be required to ensure reliability.
The firm's Energy & Infrastructure Team pointed out there are hidden costs associated with renewable energy. The costs are described as "hidden" because the cost calculations for those energy sources don't factor in the price of transmission and backup generation. The intermittency issue increases the cost of integrating renewables with the grid, and the cost increases are typically paid for by consumers in taxes and energy bills.
The geopolitical concerns arise due to the fact that reliance on renewable energy gives unwarranted power to other nations. For example, China is the leading producer and processor of rare earth metals. The Congo and Russia control most of the world's cobalt. The concentration of these increasingly valuable assets could lead to negative geopolitical consequences.
According to Energy Alliance, in more than 20 years, no state has added more renewable energy to its grid than Texas, which was driven by more than $24 billion of federal, state and local subsidies.