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Category — Spain

Spanish Wind, Revisited

Two years ago, Spain’s fixation on renewables and “green jobs” was praised by President Obama as a success story worthy of our emulation. With Obama making renewables a centerpiece of his administration with an eye toward the 2012 election, the obvious question is: How is Spain doing today?

The Initial Debate

My editorial “Spain Is Tilting at Windmills” (May 2009) presented the results of a study prepared by Gabriel Calzada Álvarez, PhD, an economics professor at King Juan Carlos University in Madrid. The report, “Study of the Effects on Employment of Public Aid to Renewable Energy Sources,” released in March 2009, was a comprehensive review of the long-term effects of Spain’s renewable energy policy on jobs and the economy. In sum, the study found that for every green job created, 2.2 private industry jobs were lost, and each “green job” cost the Spanish government 571,000 euros ($790,000 today).

After my editorial was published, the U.S. National Renewable Energy Laboratory (NREL) published a poorly reasoned rebuttal to Professor Calzada’s study. NREL’s report made the usual mistakes when accounting for “green job” creation. A good example is the baseless assumption that there is a pool of qualified people not otherwise employed by private industry, immediately available, and willing to take newly created, government-subsidized, green jobs. Transferring skilled workers from jobs that produce value (profits) to “green jobs” created by government fiat is an inefficient way to deploy capital in a free market economy.

The report also ignores the impact of the costs (taxes and increased deficits) of the temporary green jobs. By redeploying capital that would otherwise be used for investment or developing new products, these costs impose an economic opportunity loss to the free market. Finally, the authors assume that government-paid green jobs, paid for with deficit spending, are not temporary but permanent. [Read more →]

April 13, 2011   6 Comments

Simulations or Country Experience? Spain, Denmark, and NREL in the Renewable Energy Controversy

For a long time, fans of renewable electricity have made their case by running simulations. Input the right data and (more importantly) the right assumptions, impose a renewable portfolio requirement or carbon plan, compute 30 years forward, and walk into a clean, fully employed future. Just close your eyes, click your heels, remember
to believe, and elect the right federal government.

Then reality intervened in the form of two country-wide case studies.

Denmark

More than a year ago, this column scooped the mainstream media with the truth about Denmark’s 20 percent wind generation. The country actually uses less than half of that power, but can keep the machines spinning thanks to (export) connections with the coal-based German grid and the nuclear- and hydro-based Scandinavian RTO.

For all this, the little mermaid enjoys the highest power costs in Europe. There is now an excellent report with lots of data by a think-tank there called CEPOS, which occupies roughly the same position that the pro-market Cato Institute does in Washington. (Disclosure: I am a Cato adjunct scholar and have taken money from them. Cato itself, like CEPOS, is supported almost entirely by private—as opposed to corporate—money.)

The study points out the sad fact that in a few years Denmark’s neighbors will be producing enough of their own wind power that their grid will have difficulty accepting Denmark’s, even if it comes gratis.

Spain

Spain is a more tragic story. [Read more →]

October 1, 2009   2 Comments