European energy lessons for Dalton McGuinty

[Keepitsimple]

The failure of green-energy policies throughout Europe provides an important lesson for Canadian politicians — especially Ontario Premier Dalton McGuinty and his fellow Liberals, who have rushed headlong into green alternatives such as wind, solar and biofuel with as much enthusiasm (and taxpayer money) as any government in North America.

In less than a decade, Germany has given power companies and consumers $130-billion in subsidies, mostly to develop a market for solar energy. Despite all that cash, solar electricity still accounts for only 0.3% of Germany’s power supply. Because only some of that total has been covered by taxpayers, and the rest has been passed on to all electricity consumers, the cost of German green-power subsidies will add nearly $300 to the average German family’s power bill this year alone. For industrial power consumers, the added costs can run into hundreds of thousands of euros per year. Philipp Rosler, the federal minister of economics and technology, warned earlier this month that the cost of green power was a “threat to the economy.” As a result, the federal German government is looking to get out of the subsidy business, and the German solar industry is gasping for air.

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Ontario’s frightfully expensive green-energy campaign will almost certainly go the way of its European forbearer. The only question is how much money gets wasted in the interim.

Mr. McGuinty’s Ontario government has abandoned most of its eco-power initiatives already: Over the past 18 months, it has announced it won’t stick the provincial landscape full of giant wind tower turbines, and it will orphan the small-scale solar-panel farms it encouraged landowners to build because there is no economical way to get the power they generate into the provincial grid. About the only part of its strategy that remains is the higher power prices needed to cover development of the alternate sources that have already gone ahead.

If the Ontario government were to stop now, the province’s consumers would still likely have to pay power costs 20% to 30% higher than in 2008 — the year before the Green Energy Act — for the rest of this decade, just to pay for the failed initiatives to date. Ontarians should tell their government to take a lesson from Europe: It’s time to awaken from Dalton McGuinty’s misguided green dream.

http://fullcomment.nationalpost.com/2012/02/22/national-post-editorial-board-european-energy-lessons-for-dalton-mcguinty/

Link:

[Keepitsimple]

The Green Energy Act (GEA) was proposed as both an environmental policy and a job-creation policy. It is misguided on both scores.

With regards to job creation, there is nothing special about subsidizing electricity generation. It’s just as harmful as subsidizing anything else. We have long and lamentable experience in Canada with failed job creation schemes based on subsidies to money-losing industries. From Sprung cucumbers to Bricklin sports cars, governments have regularly learned and relearned, at taxpayer expense, the immutable rule that if a business plan depends on subsidies, the jobs it creates are not sustainable, and if the business is profitable on its own, it doesn’t need subsidies.

An industry that depends on subsidies for its survival is not a net source of jobs. The funds for the subsidies have to be raised through taxation, and the burden of taxes kills more jobs than the subsidies create. This is as true for wind power as it is for greenhouse cucumbers, and it doesn’t matter if the taxes are visible or are hidden in the form of feed-in tariffs and artificially inflated electricity bills.

In countries like Spain and the U.K., which launched their own versions of the GEA a decade ago, the job losses are now being confirmed by independent analyses. In the U.K., a report by Verso Economics used the Scottish government’s own macroeconomic model to show that, despite receiving net transfers of about £330-million ($521-million) from the rest of the U.K. for its renewables sector, Scotland still experienced a net job loss from wind power, and for the U.K. as a whole, 3.7 jobs were lost for every job created in renewable energy.

Link: http://opinion.financialpost.com/2011/05/16/ontarios-power-trip-the-failure-of-the-green-energy-act/

[waldo]

you're on a roll Simple. Your first (OP) link reference ties into another recent MLW thread that stems from the 'writings' of renowned fake skeptic Bjorn Lomborg. Not to be outdone, your second post draws upon a dated FP article from none other than one of the most failed fake skeptics, Ross McKitrick... he who has absolutely no credibility in anything. Yes, we've had some fun at McKitrick's expense in other MLW threads. The biggest red flag in the linked piece is McKitrick drawing upon that most failed/debunked study of Spain wind/renewables and related job impacts... you know the one, right Simple? - this one, the same one you flogged, and failed with, in an earlier MLW thread - here:

it only gets better in your linked article when McKitrick draws upon a 'study' from an obscure organization, "Verso Economics"... which turns out to be a one-man organization, a guy with absolutely no association or foundation in renewable energy... or any energy for that matter. Of course, this is standard fare for disinformation campaigns and the usual suspects ran with this study, big time. A study that draws upon the favoured fake skeptics go-to, "lost opportunity costs". Of course, it doesn't hurt to have a study localized on a small segment of Scotland's offshore wind deployment and extrapolate that wildly to infer across the entire UK alternative energy complement.

in any case, I expect we could have an interesting discussion if you'd like to step-up and present an actual topical assessment on the status of UK wind energy deployment, job & growth estimates/projections, ties to UK goals as relates to overall renewable commitments to the EU, active projects, projects in deployment phases, investments from international business interests, etc. Of course, for you to do that, you'd have to step out and beyond simply drop linking and quoting from the NP/FP disinformation outlets. Could you do that, hey Simple?

[Wild Bill]

in any case, I expect we could have an interesting discussion if you'd like to step-up and present an actual topical assessment on the status of UK wind energy deployment, job & growth estimates/projections, ties to UK goals as relates to overall renewable commitments to the EU, active projects, projects in deployment phases, investments from international business interests, etc. Of course, for you to do that, you'd have to step out and beyond simply drop linking and quoting from the NP/FP disinformation outlets. Could you do that, hey Simple?

Waldo, do we really need such an in-depth analysis? How about something more basic, such as "Has Europe bailed out of solar and wind subsidies?"

All we really need is a yes/no response. After that we can debate if the decision made economic sense.

[waldo]

Waldo, do we really need such an in-depth analysis? How about something more basic, such as "Has Europe bailed out of solar and wind subsidies?"

All we really need is a yes/no response. After that we can debate if the decision made economic sense.

WB, to the degree/level that your question may or may not be representative, to you, what does "bail out" imply? Does it, for example, imply failure... or success of subsidy programs? And, of course, what comparative reference applies, particularly in regards to the amounts of EU subsidies for nuclear, coal and gas - subsidies that are currently in place for all, and have been in place for decades? If you don't recall, I can most certainly point you to past MLW threads/posts that have highlighted the historical disproportionate level of subsidies applied to fossil-fuel industries over alternative energies. In regards to G8/G20 commitments to reduce/remove fossil-fuel subsidies, would you classify that as a like, "bail out"... and, if so, would that imply failure... or success?

[Wild Bill]

WB, to the degree/level that your question may or may not be representative, to you, what does "bail out" imply? Does it, for example, imply failure... or success of subsidy programs? And, of course, what comparative reference applies, particularly in regards to the amounts of EU subsidies for nuclear, coal and gas - subsidies that are currently in place for all, and have been in place for decades? If you don't recall, I can most certainly point you to past MLW threads/posts that have highlighted the historical disproportionate level of subsidies applied to fossil-fuel industries over alternative energies. In regards to G8/G20 commitments to reduce/remove fossil-fuel subsidies, would you classify that as a like, "bail out"... and, if so, would that imply failure... or success?

Well, I use "bail out" in its broadest sense, stopping subsidies to industries that are not self-sustaining on their own.

Oil certainly has and does get subsidies and I would say the industry doesn't deserve them. After all, that industry IS self-sustaining! It won't die without subsidies.

I'm a techie, remember? I don't respect industries that only survive because they are propped up for political gain. Wind and solar on a larger scale fall into that category, in my opinion.

Obviously, if they WERE profitable and self-sustaining they wouldn't need subsidies! Doh!

I don't agree with the idea that just because oil got and gets subsidies it doesn't deserve that wind and solar somehow deserve the same. That's worse than throwing more money down a rat hole! Wind and solar are going to need a LONG time to become profitable - maybe never!

So by my yardstick as a techie wind and solar are failures, at least as to how they have been applied on large scales.

That being said, again as a techie I have much more hope for smaller, decentralized applications. The collapse of the solar photo-voltaic industry leaves a glut of product on the market, which will allow some fire-sale purchases. The only thing left for a viable solar power solution for the single-home market is a reasonably priced battery bank.

In that area I think the electric car might prove to be the answer! As more and more electrics are on the road there will be initially batteries from car wrecks for the do-it-yourselfer to acquire. A few years after that and the price of replacement batteries might well be low enough for the average home solar power installation.

Countries seem to think that solar and wind power must be used only by large state utilities. Frankly, once again as a techie that looks to be a rather dumb and ignorant idea! It is "ready for the LAST war!" type thinking, possibly augmented by political desires to retain control.

Certainly, viable solar power for individuals is the LAST thing any premier of Ontario would want, what with over 30 BILLION dollars of stranded Ontario Hydro debt still on the books. I don't think they would support any solution that allowed individuals to go "off grid". There would be no more payments for all those extra fixed charges on the monthly bill!

Anyhow, to put it more simply Waldo, my definitions are always "techie" definitions. Does something work or doesn't it? Will it be profitable and self-sustaining on its own or won't it?

Anytime someone tries to give me some convoluted argument to get around those simple definitions it always seems to end up that their way will never actually work efficiently and will ALWAYS be more expensive!

[waldo]

Obviously, if they WERE profitable and self-sustaining they wouldn't need subsidies! Doh!

the obvious contradiction to your statement being the long historical, continued (and unneeded, as you acknowledge), level of fossil-fuel subsidies. They are profitable (Doh!), they are self-sustaining (Doh!) and yet they retain their huge, huge subsidy levels.

The collapse of the solar photo-voltaic industry leaves a glut of product on the market, which will allow some fire-sale purchases.

collapse of the PV industry? Say what? EPIA - 2011 Market Report

Globally, PV systems connected to the grid rose from 16.6 GW in 2010 to 27.7 GW in 2011. The number of markets reaching more than 1 GW of additional capacity during 2011 rose from 3 to 6. In 2010 the top 3 markets were Germany, Italy and the Czech Republic; in 2011 Italy leads the ranks and Germany, China, the USA, France and Japan follow, each with over 1 GW of new capacity.

The European share in the global PV arena still remains predominant with more than 75% of all new capacity in 2011. The 2 biggest markets, Italy and Germany, account for nearly 60% of global market growth during last year.

Total installed PV capacity world-wide reached over 67.4 GW at the end of 2011. PV is now, after hydro and wind power, the third most important renewable energy in terms of globally installed capacity. The growth rate of PV during 2011 reached almost 70%, an outstanding level among all renewable technologies. The total energy output of the world’s PV capacity run over a calendar year is equal to some 80 billion kWh. This energy volume is sufficient to cover the annual power supply needs of over 20 million households in the world.

[Wild Bill]

the obvious contradiction to your statement being the long historical, continued (and unneeded, as you acknowledge), level of fossil-fuel subsidies. They are profitable (Doh!), they are self-sustaining (Doh!) and yet they retain their huge, huge subsidy levels.

collapse of the PV industry? Say what? EPIA - 2011 Market Report

How Have I uttered a contradiction? Oil should not get subsidies! Oil should not have gotten them in the first place! Where's the contradiction? Are my statements wrong?

As for PV collapse, then I guess you are telling me that those industries in Europe don't need subsidies! The fact that countries are stopping them will not affect the industry in the slightest.

For that to be true, the industry must be profitable and self-sustaining at producing power on its own. I would assume that means that new installations are still being built at an accelerated rate. After all, if it is profitable on its own wouldn't they be fools not to?