(/sites/default/files/uploads/2012/06/rioplus20large.gif)The spin doctors of renewable energy are in overdrive. On June 11 the renewable energy establishment jointly released the UN’s annual report on financial investment in the sector (Global Energy Investment 2012) and the annual report by REN21 (Renewable Energy Policy Network for the 21st Century, a UN spinoff) which focuses on the end uses of renewable energy – how much is being used in what sectors of the economy. The double release was timed nine days prior to the UN’s coming summit on “sustainable development” entitled Rio + 20 [it’s been years since the last Rio environmental gabfest]. It is designed to push the summit–with an expected attendance of 50,000, from heads of states to run of the mill activists– to enact yet more subsidies for renewables in pursuit of the holy grail: a “green” economy.
No one expects the media or delegates to read lengthy reports. In this case a single summary report of both reports has been issued, so that it is not even necessary to read two summaries. As in the case of the UN’s International Panel on Climate Change reports, the summary is more tendentious and politically loaded than the reports on which it is based. But given that the summary is what is widely read and quoted–certainly it’s all the Rio delegates are likely to read–it carries the greatest weight. And it has a dual message. On the one hand the renewables sector is moving forward splendidly. Investment in solar has now outstripped that in wind and overall investment in renewables in 2011 grew 17% over 2010 despite the miserable economy. End uses have also grown strongly, to the point where renewables now supply 16.7% of total global energy consumption. On the other hand, there are headwinds. Those lower costs create pain on the supply side, sinking some major companies. Bottom line: the summary report quotes Achim Steiner, Executive Director of the UN Environmental Programme: “This sends yet another strong signal of opportunity to world leaders and delegates meeting later this month…It is essential to continue government policies that support and nurture the sector’s growth…Otherwise the low-carbon transition could weaken just at the point when exciting cost reductions are starting to transform the economics.” A not so veiled threat here to the assemblage at Rio. Keep the subsidies coming or the green economy could collapse and it will be your fault.
The summary report obfuscates the underlying reality. Take that 16.7% of global energy consumption provided by renewables. By focusing heavily on the great percentage jump in solar and wind capacity, the report leaves the impression that these technologies provide a significant segment of that 16.7%. But while you could tease it out of the diagrams in the full length REN21 report, you’d never guess from the summary report that sun and wind together provide a lot less than 1% of that energy (or even of electricity, a much narrower measure).
And what of costs? The summary report slips and slides on that topic. We are told that gross investment in fossil fuel capacity in 2011 was $302 billion with renewables (excluding large hydro, which greens don’t like) moving closer at $237 billion. But there’s no mention of how much energy the public gets relative to the two investments. There’s a lot of talk of adding “capacity” but capacity is deceptive when it comes to wind and solar. Because the wind doesn’t blow all the time and the sun doesn’t shine, capacity is much higher than the actual energy generated. For the same reason you need backup facilities using dependable coal or gas. These should be included in figuring the cost of renewables (but generally aren’t). For example, Britain has concluded it will have to construct an additional 17 natural gas plants as backup for its new wind turbines, at a cost of ten billion pounds.
The summary report says costs are coming down to the point where, in a few years, wind and solar will be competitive with fossil fuels. Let’s take wind first. The report says the costs of generating onshore wind fell 9% in 2011. Onshore. There’s the rub. If we are going to project into the future, the growing public clamor against onshore wind turbines, especially in Europe, has to be taken into account. They are widely viewed as blots on the landscape (a state of the art turbine is taller than the Washington Monument), a health hazard to those living in close proximity, a detriment to real estate values, and a blow to tourism. Talk about growth: The European Platform Against Windfarms, founded in 2008 by groups from four EU countries, now has 532 member organizations from 23 countries. Even Denmark, whose new government has grandiosely proposed completely phasing out fossil fuels by 2050 (Germany is not far behind with an 80% mandate for renewables by 2050) has bowed to public detestation of turbines, promising most will be built offshore. But offshore turbines, according to the Energy Information Administration (EIA)of the U.S. Department of Energy, are three times more expensive. And, once they are buffeted by storms and tides, no one knows how expensive they may be to maintain.
As for solar, while it’s true the price of photo voltaic cells has dropped dramatically, that’s only part of the cost of solar power generation. The EIA estimates that in 2016 the cost of new solar generation will still be three times the cost of new natural gas facilities. That’s in the United States, but the relative costs elsewhere are not likely to be radically different.
Seeking to minimize the importance of the high profile failures in the renewables sector, the summary report offers a specious comparison to the auto industry. “In 1903, the United States had over 500 car companies, most of which quickly fell by the wayside even as the automobile sector grew into an industrial juggernaut….Today, the renewable energy sector is experiencing similar growing pains as the sector consolidates.” But those 500 companies did not depend on the public dole to survive. The winners provided cars whose market price the public was willing to pay, because of cost, performance, style, reliability, quality of construction or a combination of such factors.
On jobs the summary report is also deceptive. We are told: “Globally there are more than 5 million jobs in renewable energy industries, and the potential for job creation continues to be a main driver for renewable energy policies.” What this conveniently overlooks are the studies that show that green jobs destroy many more jobs than they create. A widely quoted study at Spain’s Universidad Rey Juan Carlos found that Spain had lost 2.2 jobs for every “green” job created. An April 2010 internal assessment by the former Zapatero government concluded that government subsidies for renewables (which had increased five fold between 2004 and 2010) had driven the price of electricity to 17% above the European average, undercutting the competitiveness of Spanish industry.
As long as Europe clings to its obsession with going green, the situation is likely to get worse. A report in the United Kingdom by the Energy Intensive Users Group (EIUG) and the Trade Union Congress cites steel making, ceramic, paper, cement and lime manufacture, aluminum and basic inorganic chemicals as British industries whose viability is threatened by green policies. EIUG director Jeremy Nicholson reminds his countrymen that these industries “make a significant contribution to UK GDP and exports.” Germany’s third largest aluminum company recently declared bankruptcy. Ulrich Grillo, president of Germany’s trade body for the metal industry, warns the production of metals is at risk in Germany due to high electric prices that “result clearly from the state support system for renewable energies and especially photo-voltaics.” Although Angela Merkel’s Germany has a reputation for fiscal hard headedness, fiscal sanity goes out the window when it comes to green policies. A German utility executive has observed that solar energy in cold and cloudy Germany makes as much sense as growing pineapples in Alaska yet Germany now has half the world’s solar photovoltaic capacity.
Solar and wind facilities are niche products that will depend on subsidies as far as the eye can see. If they were close to being competitive, as the green advocates who put together these reports claim, they would not be so concerned about preserving and extending those subsidies. For profit companies would be investing in the sector without the promise of subsidies on which “investments” are now predicated.
It goes beyond jobs. Increasingly, green spells poverty. Four million of England’s 21.5 million households suffer from “fuel poverty” (defined as when fuel bills take up more than 10% of household income) with the number expected to rise to 9.2 million by 2016, with green taxes and levies the primary culprit. Der Spiegel has reported on the extent to which German low income consumers are paying the price for the move to renewable energy. It quotes Holger Krawinkel of the Federation of German Consumer Organizations: “Approximately every tenth household currently has problems paying for rising energy costs.” Consumer protection advocates blame the unchecked expansion of highly subsidized photovoltaic installations. Consumers, many of them low-income renters who obtain no benefit, are on the hook to pay 100 billion euros over the next 20 years to subsidize photovoltaics installed before the end of 2011.
All this damage to public well being and economic viability is being done in service of an apocalyptic fantasy, namely that man-made global warming is bringing Armageddon . As those many thousands assemble in Rio next week to save the earth we should remember that it is they who are the menace–to progress and prosperity on this planet.
Rael Jean Isaac is author of Roosters of the Apocalypse: How the Junk Science of Global Warming Almost Bankrupted the Western World (Heartland Institute, 2012).
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