Category — ‘Green Energy’ Failures
[Update: Germany Stops Fighting Arithmetic and Ramps Up Construction of Economically Sensible Power Generation]
Two years ago we looked at the claim that wind generation can save money for power pool customers. We found that the supposed savings could be realized only if the elephant in the room – the above-market feed-in tariffs – were ignored.
In other words, the total amount spent on electricity purchases from a power pool was augmented by the additional amounts consumers pay to fund the feed-in-tariff (FIT). As long as wind generators can bid a low price but receive the higher FIT, then they have an incentive to underbid, thereby reducing pool prices, but not overall costs.
In addition, we looked at what an economically least cost system might look like in Germany over the next ten years. We found that it features more coal and lignite, keeps most nuclear plants operating, and builds new gas-fired plants.
The annualized differential in total costs for Germany between the no-nukes, no coal and lots of wind forecast pushed by Germany’s Greens and an economically least cost expansion plan amounts to more than $120 billion over ten years and perhaps as much as $200 billion. A lot of money, in other words.
Update: Since these two posts were published in 2010 Master Resource contributors have made a strong case that Germany’s overinvestment in wind and solar has harmed the nation financially without any compensating improvement in electricity supply. Compounding the overreliance on wind is the planned phase-out of the country’s nuclear power plants – baseload power that will need to be replaced with something other than wind.
It now appears that Germany has made peace with mathematics and economics, and not just in the energy sphere. The country has embarked on a major effort to build reliable power plants for the future. [Read more →]
February 21, 2013 20 Comments
“BC Hydro is forecast to lose one billion dollars over the next four years, as a result of the pursuit of green electricity…. The public policies that politicians of all stripes have imposed on us to address climate change will haunt us for years.”
British Columbia, Canada’s westernmost province, is blessed with an abundant and almost unlimited capacity to generate hydroelectric power. This capacity is the result of the farsighted policies of past BC provincial governments that invested in, or encouraged investment in, a series of hydroelectric mega-projects in the 1950’s, 60’s and 70’s. British Columbia has enjoyed the benefits of inexpensive, clean electricity ever since.
Apart from stints of economic contraction that, coincidentally, accompany BC’s infrequent brushes with the government’s socialist New Democratic Party (NDP), BC’s economy has generally boomed in large part as a direct result of our hydro electric capacity.
Canada has a history of creating public utilities to generate and transmit energy, which for British Columbia is BC Hydro. BC Hydro is highly regulated with respect to rates and operations and traditionally operated as an independent, apolitical entity.
That changed when politicians from all parties, driven by the media and statist intellectuals, recognized the increased revenue potential from surcharges and “green” taxes based on the notion of CO2-induced climate change. BC Hydro became an instrument for public policy, and a new way for government indirectly to fund green energy initiatives.
February 19, 2013 10 Comments
Heritage Foundation List of Failing or At-Risk Taxpayer Energy Ventures (34 companies, $7.5 billion, and counting)
Energy and environmental policy is a national priority. Lawmakers should implement a long-term plan that allows free markets to balance supply and demand, ensures reliable and competitively priced energy for the future, and creates incentives for responsible stewardship of the nation’s resources and environment.
A recent report, “President Obama’s Taxpayer-Based Green Energy Failures,” lists 34 examples of “faltering or bankrupt green-energy companies” (with * denoting companies that have filed for bankruptcy). The at-risk total is approximately $7.5 billion, of which $1.6 billion is in receivership.
The numbers will only get higher. Yesterday, it was reported that the Solyndra loss could be $849 million (not $535 million). And there might be a rush after the election with or without an extension of the Production Tax Credit.
Here is the Heritage Foundation list: [Read more →]
October 23, 2012 4 Comments