Tuesday, June 19, 2012

Don’t sell the power companies—throw money my way instead [updated]

_NOrman"Selling our power companies is the worst way to go,” says Green co-leader Russel Norman. “ They should instead be supercharged,” says Norman, “so they can develop clean, green energy technology we could sell around the world."

Really?

Dr Norman says “"smart, green economics" is the way to go because the international market for sustainable products and clean energy technology is growing rapidly.”

Really? Is that right?

Well, no.  It’s not. Like virtually everything else the Ginger Whinger says, it’s not right. Not right at all. The international market for “clean energy” is bankrupt.  Not just struggling. Not just a little bit bankrupt. It’s completely, wholly and abjectly bankrupt.

imageIt’s bankrupt in Spain where 12 billion Euros were spent in 2009 alone, €571,138 creating each “green job,” and with each “green” megawatt installed destroying 5.28 jobs on average elsewhere in the Spanish economy.

It’s bankrupt in Germany, where even with subsidies 300% higher than conventional electricity generation consumers pay nearly ten percent more—and carbon abatement costs at $1,000 per ton for solar power are roughly fifty times the European price for carbon.

It’s bankrupt in the Netherlands, the home of the windmill, where after billions of euros of subsidies, most going outside the Netherlands, Prime Minister Mark Rutte now recognises today’s “windmills turn on subsidies.”

It’s bankrupt in the United Kingdom, where it raises the cost to consumers by £1.1billion; where for every job created in the United Kingdom in “renewable energy” 3.7 jobs are lost; and in winter (when they’re needed most) Britain’s forest of wind turbines consumes more power than it produces.

So where is Norman getting his news from? Certainly not from Europe. And not from the States either, where despite the combination of Obama’s windy rhetoric and billions of dollars of subsidies “sustainable energy” is still not sustainable--where the White House sank half a billion taxpayer dollars into Solyndra, a company it knew was failing, and did--where the companies Ener1 and A123 Systems floundered after sucking another half-billion from taxpayers--which are dwarfed by the failure of company Solar Trust of America, which failure on its own leaves US taxpayers on the hook for a further $2.1billion!

And these are  just the headline failures. Sterling Burnett lists the whole sorry mess of America’s green energy’s bankrupt blackout, first, the bankruptcies:

    • Beacon Power Corp: Received $43 million in federal loan guaranteed in 2009 and also received $29 million in PA grantsBankrupt in October 2011
    • Ener1 (parent company of EnerDel): Received $118.5 million in federal loan guaranteesBankrupt in January 2012 – has since exited bankruptcy
    • Evergreen Solar: Received $58 million in MA loan guarantees (an undisclosed portion sourced from federal ARRA block grant)Bankrupt in August 2011 with $485.6 million in debt
    • SolyndraReceived $535 million in federal loan guarantees in 2009 and $25.1 million in CA tax creditBankrupt in August 2011
    • SpectraWattReceived $500,000 in federal loan guarantees in 2009Bankrupt in August 2011
    • Babcock and Brown: Received $178 million in federal grants in December 2009 (4 months after it went bust)Bankrupt in early 2009
    • Mountain Plaza Inc.: Received $424,000 in federal grants through TN Department of Transportation in 2009Bankrupt      in 2003 and again in June 2010
    • Solar Trust of America (parent company: Solar Millennium from Germany): Received $2.1  billion loan guarantee in April 2011Bankrupt in April 2012

And the other subsidized “Green Energy” companies in decline:

    • A123: Received $300 million in federal grants and $135 million in MI grantsDeclining orders and have forced multiple layoffs
    • Amonix, Inc.: Received $5.9 million in federal tax credits in 2009 through  ARRALaid off 2/3 of work force
    • First Solar: Received $3 billion in federal loan guaranteesBiggest S&P loser in 2011, CEO fired
    • Fisker Automotive: $529 million in federal loan guaranteesMultiple 2012 sales prediction downgrades for first car release, delivery and cash flow troubles;Assembling cars in Finland
    • Johnson Controls: Received $299 million in federal grants in 2009Low demand caused cancellation of a new factory, operating at half capacity
    • Nevada Geothermal: Received $98.5 million in federal loan guarantees in 2009Defaulting on long-term debt obligations, 85% drop in stock value
    • Sun Power: Received $1.2 billion in federal loan guaranteesDebt exceeds assets; French oil company took over last fall
    • Abound Solar: Received $400 million in federal loans in 2012½ work force laid off
    • BrightSource Energy: $1.6 billion federal loan approved in April 2012 – loan obtained through political connections with the administration; absent the loan, Brightsource’s solar power purchase would have fallen through.

That’s the record so far, and by year’s end once tax breaks on this madness lapse fully one-half of the industry’s jobs will be gone—gone because without the special favours these “green energy” “innovators” absorb more resources than they produce.

So that’s how well “green energy” is doing.  This really is “the worst way to go.”

“Sustainable energy” is not sustainable—not even with subsidies. “Renewable energy” is not renewable—not even by  leaving the taxpayer on the hook for billions.

So why does the media not challenge Russel Norman for continuing to pretend he owns the source to some economic magic bullet?

UPDATE: Liberty Scott makes an excellent point about the Ginger Whinger’s taxpayer-funded referendum:

If the parties that lost the last election can demand that the Government seek an additional electoral mandate to implement the policies National stood on in its 2011 manifesto, then surely the same applies in reverse.
Every time the state buys something with taxpayers' money, it should ask permission…

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19 Comments:

Blogger Jeremy Harris said...

Don't forget Tesla Motors which receives US government subsidies and federal loans well below market rates, but still manages to lose a couple of hundred million dollars every year.

Some PVC manufacturers are reducing costs to parity with fossil fuel generation but suitable sites are a rarity.

The simple fact is until cheap mass storage is developed and renewable generation costs are lower than convential generation (to account for energy lost during storage) than renewable energy is a pipe dream.*

*Apart from hydro and geothermal.

6/19/2012 11:57:00 am  
Anonymous Bodger said...

Wow, with a scoop like this you could actually become part of "the media" and then call him on it yourself.

You'd think at least 1 person on TV would have the balls to stand up to this communist, lunatic, moron, ginger, facist, treehugger, Maoist, godless, "gay", nerdy, dope-addicted.........

6/19/2012 12:49:00 pm  
Blogger Paul Walker said...

There are lots of bad reasons for being anti the government's planned sale of SOEs, as you note. But I would argue that we shouldn't loose sight of the fact that there are also good reasons for being anti the plan. See here for a few.

What we should be fighting for is a competitive 100% sale of the SOEs.

6/19/2012 03:31:00 pm  
Blogger Jeremy Harris said...

What we should be fighting for is a competitive 100% sale of the SOEs.

What we should be fighting for is 100% allocation of SOE shares to NZ taxpayers. Why should we pay again for that which we've already paid for?

6/19/2012 04:54:00 pm  
Blogger Paul Walker said...

"What we should be fighting for is 100% allocation of SOE shares to NZ taxpayers. Why should we pay again for that which we've already paid for?"

So you want SOEs to be given away? How do you allocate shares to people in an efficient manner?

6/19/2012 05:00:00 pm  
Anonymous Simon said...

A simple mechanism would be for the Green shirts and various collectivists to create an SOE trust where their supporters could eagerly transfer any SOE share purchases. The beneficiaries of the Trust being the common good as determined by their glorious leadership.

That would show everyone.

Next of course would be a voluntary higher tax bracket. This would kick start the Green economic revolution. With the number of people clamoring for higher taxes this is bound to be winning policy.

6/19/2012 08:39:00 pm  
Anonymous Richard Watts said...

You can also add Chesapeake to that list as well. The energy business is tough for all players and the recent glut of gas in the U.S.A. has been tough for both the gas players and the renewable sector but of course someone with an agenda obviously misses the obvious. You can also add to that the recent dumping of Chinese solar panels at below cost based off government subsidies back in China which has put many of the solar companies on the brink or over the edge towards bankruptcy.

6/19/2012 10:51:00 pm  
Anonymous Anonymous said...

Come now everyone, you all know full well that the MSM in this country will never,ever hold the greens to account.

It is one of the reasons that the greens are so dangerous.

EXOCET

6/20/2012 07:53:00 am  
Blogger Mark Hubbard said...

Part of the problem is, many of our own businessmen don't understand the issues behind the asset sales ... you might be interested in my post here PC.

And someone better let me know if I'm wrong on the damned theory ...

6/20/2012 08:58:00 am  
Blogger Sally said...

Enjoy the reading from these links

http://www.dailymail.co.uk/news/article-2161379/This-meaningless-green-drivel-environment-guru-Scientists-U-turn-doomsday-claim.html

http://www.telegraph.co.uk/comment/9338939/Global-warming-second-thoughts-of-an-environmentalist.html

http://www.iea.org.uk/blog/naomi-kleins-green-shock-doctrine

6/20/2012 09:44:00 am  
Anonymous Richard Watts said...

Mark you seem to be under the assumption that people when given the opportunity to play the game by their own rules will play the game fairly. People living under a laissez faire system typically have the tyranny of governance filled by something else with even less accountability than what our current democracy entails. Countries with weak governance are countries which are under the yoke of some other country which uses the local resources for their own benefit and pump the wealth back home for the benefit of foreigners.

Planning itself does actually make sense from time to time. It is far better for people to have stability of supply for something like electricity than it is for them to be unable to plan for stability. You can make better private decisions knowing that certain things are assured by the public domain. Without certainty you have to make more conservative decisions which is exactly the opposite of the ideal of dynamic free market capitalism.

6/20/2012 01:07:00 pm  
Blogger Mark Hubbard said...

Richard, what are you talking about?

Classical liberalism: there's still the rule of law.

6/20/2012 01:18:00 pm  
Blogger Jeremy Harris said...

So you want SOEs to be given away? How do you allocate shares to people in an efficient manner?

Yes. You can't, so give an equal number of shares to registered voters over 18.

6/20/2012 03:53:00 pm  
Anonymous Richard Watts said...

Yes and in an ideal world everything works smoothly. We don't have monopolistic companies and perfect competition exists and resources are both abundant and don't deplete. In this world economic growth is only dependent on the skill and talent of human beings.

In the real world however we have governments engaging in unsavoury trade tactics, mercantilism, currency pegging and state sponsored capitalism and resource acquisition. We also have monopolies and corporations which behave as inefficiently at times as government departments.

So yes if the world was ideal then you could take your idealism and run with it. Unfortunately the world is not ideal and therefore the best position lies somewhere in the middle between the extremes and not strictly liberal nor strictly controlled.

6/20/2012 05:48:00 pm  
Blogger Mark Hubbard said...

Richard, the problem with your 'balanced' approach, is that after sixty years of hugging the 'middle ground' the West has destroyed itself under a Keynesian hubris of debt.

Care to explain how that happened then?

6/20/2012 06:26:00 pm  
Blogger rutran martin said...

There are lots of bad reasons for being anti the government's planned sale of SOEs, as you note.
Company Test Papers

6/20/2012 07:20:00 pm  
Anonymous Anonymous said...

This comment has been removed by a blog administrator.

6/21/2012 02:14:00 am  
Anonymous Anonymous said...

The point of my previous post is that the article is very selective about subsidies and neglects to mention that fossil fuels have, and continue to get massive subsidies too. Puts things in a different light.

"$409 billion equivalent of fossil fuel subsidies"

In light of the above, small subsidies to renewables are not as 'criminal' as they are made out to be.

Of course you could wipe all subsidies...but you should wipe the fossil fuel ones first.

6/21/2012 02:17:00 am  
Blogger Peter Cresswell said...

@Anonymous: I removed your earlier post because it was simply a cut and paste of someone else's article, which you've now summarised.

Interested readers can visit it at http://oilprice.com/Energy/Energy-General/Renewable-Energy-Being-Held-Back-by-Fossil-Fuel-Subsidies-IEA.html

I agree with the premise that so-called "fossil fuel subsidies" should end. But I would take issue with the figure quoted--I believe the worldwide figure more in the order of $10 billion or so. And I would point out that a tax break is not a subsidy. It's a tax break.

That said, it's undeniable that (very much unlike the case with so-called "renewable energy") the oil industry would have no trouble at all surviving in the absence of subsidies.

6/21/2012 09:55:00 am  

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