There would be no Green Energy Industry if there were no Green Energy Subsidies

Posted by PITHOCRATES - March 15th, 2014

Week in Review

Green energy investments are a horrible investment.  The only reason why anyone is building green energy projects is because of taxpayer subsidies.  If you take away the subsidies the green energy industry is just going to stop building these bad energy projects.  Which is what’s happening now (see Here Are The 10 Best States For Clean Energy Jobs In 2013 by Aaron Tilley posted 3/12/2014 on Forbes).

Clean energy investments had it rough in 2013, and US job growth in that sector is having a bit of trouble too.

That’s at least according to evidence in a new report out today from Environmental Entrepreneurs (E2),an environmental advocacy organization for businesses. While the clean energy industry made plans to add an additional 78,000 new jobs at 260 projects in 2013, that’s a 30% dip from the 110,000 job announcements in the previous year. (E2 has only been tracking clean energy job growth for the past two years…)

The biggest reason for the 30% drop in job growth over last year is due to ongoing regulatory uncertainty around federal tax credits and state renewable energy mandates, says E2 communications director Bob Keefe. Congress let the generous tax credits the wind energy industry had enjoyed for more than two decades expire in December–and it looks unlikely they’ll be reinstated in 2014. And four major energy efficiency tax credits and initiatives expired at the end of last year too. On top of that, several states, including North Carolina and Kansas, have attempted to roll back mandates on renewable energy requirements for their utility grids.

If anyone bemoans a cut in government spending in some government program don’t blame the Republicans.  Blame the Democrats.  And their green energy cronies.  The Democrats are taking money away from other programs to pay for these white elephants just so they and their crony friends can get rich.

These projects cost a fortune to build.  And the return on investment just isn’t there.  Which is why it takes hundreds of millions in taxpayer subsidies to build them.  That’s a lot of money to spend when these projects accomplish nothing. They don’t allow us to shut down one coal-fired power plant.  Because we’ll need those coal-fired power plants to provide electric power when the sun doesn’t shine and when the wind doesn’t blow.  And they take up so much real estate that they’re displacing wildlife from their natural habitat.  While wind farms are hacking American Bald Eagles and other birds to death.  So they’re not helping the environment.

And they’re not improving the reliability of our electric power.  Or lowering the cost.  Every time they shut down a coal-fired power plant they increase our electric bills.  And increase the brownouts and blackouts we have to endure when we have to rely on less reliable power that costs more (we have to pay more for our electric power to pay for those subsidies) than the more reliable power.  This is our government when Democrats are in power.  And just imagine how they will run our health care.  Who do you think they’ll make rich?  And how much will they increase our health care costs?  While giving us an inferior health care system?  It’s going to happen.  Because that’s what happens when Democrats are in power.

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Wind Power Expansion Reliant on Market Forces now so there probably won’t be Much More of It

Posted by PITHOCRATES - November 17th, 2012

Week in Review

The wind power market is slowing down.  Not that there was ever a wind power market.  The only way wind power has grown has been with massive taxpayer subsidies.  But as economies wallow in stagnant economic growth those subsidies are starting to dry up.  And with it the expansion of wind power in nations across the world (see Wind Power Market to Slow on EU, U.S., China Hurdles, Lobby Says by Alex Morales posted 11/14/2012 on Bloomberg).

Wind farm growth is set to slow as limits on capacity in China’s grid, falling carbon prices in Europe and a lack of direction in U.S. government policy hamper demand in major markets, the Global Wind Energy Council said.

Turbine capacity of 586,729 megawatts will be installed by 2020, from 237,699 megawatts in 2011, the Brussels-based lobby said today in an e-mailed report co-authored by environmental campaigner Greenpeace. They see annual investment of 45 billion euros ($57 billion) in 2020, down from 50 billion euros in 2011. The figure is equivalent to annual capacity growth of less than 11 percent, down from 28 percent for the 15 years through 2011…

Chinese growth in the past few years has outstripped the ability of the country’s power grid to absorb new generating capacity. In the U.S., the industry has been hobbled by the government’s failure to extend a tax credit that expires at the end of this year, and in Europe carbon prices this year have reached all-time lows, reducing the incentive to cut emissions.

The report took as its central scenario a “new policies” pathway outlined by the Paris-based International Energy Agency. Using that scenario, Greenpeace and GWEC said installations in China, slowing because of constraints in the power grid, will climb more than 180 percent to 179,498 megawatts in 2020.

Wind capacity in the 27-nation European Union will rise 120 percent to 207,246 megawatts, and North America will gain 130 percent to 121,238 megawatts. African installations will surge fivefold to 5,372 megawatts, Latin America almost triple, and Indian installations double, according to the scenario.

Let’s look at some of these numbers.  And note the units.  Annual investment in wind power is falling to $57 billion a year.  For what?  To bring installed wind turbine capacity up to 586,729 megawatts worldwide.  That’s a lot of money for not a lot of power.  As a percentage of total installed capacity that comes to about 11% for North America, 25% for China and 27% of the EU.  Sounds like it will make a difference.  And it will.  But not in a good way.

The power wind power is replacing is basically coal-fired power plants.  Which are on all of the time.  Having capacity factors reaching and exceeding 90%.  Meaning that over a given period of time 90% or more of that installed capacity will be on line producing useable electric power.  Why?  Because coal will burn all of the time.  Something wind can’t do.  Blow all of the time.  And when it blows it doesn’t always blow at the right wind speed.  Which is why the capacity factor for wind power is much lower.  About 25%.  So if you convert the wind power to equivalent coal power the installed wind turbine capacities fall.  From 121,238 megawatts in North America to about 30.3 megawatts (or about 2.7% of the total installed capacity).  From 179,498 megawatts in China to about 44.8 megawatts (or about 6.2% of total installed capacity).  And from 207,246 megawatts to about 51.8 megawatts in the EU (or about 6.8% of the total installed capacity).  Which is a lot less power for the investment.

This is why wind power is not economically viable.  And can only exist with taxpayer subsidies.  And adding a tax to the more reliable and more plentiful power sources.  Such as coal.  As in carbon prices coal-fired power plants have to pay.  A cost that they add to our electric bills.  And why are carbon prices falling in Europe?  Because the economy is so poor that there is a low demand for electric power.  In part due to the EU’s green policies that hinder economic growth.  By raising the cost of doing business.

So what will green energy do for us?  It will raise the cost of our electric power.  And make that electric power less reliable.  Making rolling blackouts a common occurrence.  Even though we’re paying more for electric power.  That is what green energy will do for us.

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Amtrak can’t make a Profit on a Cheeseburger they sell at $9.50

Posted by PITHOCRATES - October 27th, 2012

Week in Review

Poor Amtrak.  Always the example of government at its worst.  Subsidizing passenger rail when all private railroads gave up on it long ago.  Because you can’t make money on passenger rail.  So what does the government do?  They furnish a service that no one is demanding.  Pouring billions of tax dollars into a failed economic model to desperately try to keep it afloat.   And Amtrak still loses money.  Despite selling cheeseburgers at $9.50 (see Amtrak’s food service: How to lose money on $9.50 cheeseburgers posted 10/23/2012 on The Economist).

JOHN MICA, the Republican chairman of the House Transportation and Infrastructure committee, has held many hearings on Amtrak, America’s government-run passenger rail company, over the past few years. Few, though, have drawn as much attention as an August discussion of—what else!—hotdogs and beer, when Mr Mica noted that, over the past three decades, Amtrak has not once broken even on its food offerings.

… Andrew Biggs at the American Enterprise Institute, a conservative think-tank, suggests that Amtrak’s labour costs are to blame.

If you follow that link you will see these numbers:

How do you lose $85 million per year selling $9.50 cheeseburgers, as Amtrak reportedly has?

One way is to pay Amtrak employees 19% more in salaries and benefits than comparable private sector workers.

… Amtrak salaries were on average 4% lower than private sector levels. However, benefits were 81% higher than private sector levels, including 19% more paid leave, 181% more generous health coverage, and 51% more generous retirement benefits. This helps explain why, over a 7-year period, Amtrak quit rates averaged 2-3% per year while private sector quit rates were 26-27%. No one wants to give up a job with so many perks.

Going back to the Economist article:

Labour costs are part of Amtrak’s problem, but they’re not the heart of it. That honour goes to the company’s unprofitable, unpopular, slow and generally indefensible long-haul routes…

Amtrak loses a lot of money providing food service on its long-haul routes because it loses a lot of money on almost everything related to those routes. Long-haul passenger train trips, especially at Amtrak speeds, are for hobbyists, people with lots of time and very restricted budgets, and people who are afraid of flying. No private-sector company without Amtrak’s political and legal obligations would continue to operate its long-haul routes without substantial changes.

All passenger rail loses money.  Except for, perhaps, the Bullet Train in Japan.  And the TGV in France.  These are the only two trains (at least they were at one time) that actually make a profit.  All other trains cannot survive without taxpayer subsidies.  Because rail transportation is very expensive.  Moving heavy freight by train works because it’s the most cost efficient option for heavy freight.  And sometimes the only option.  But moving people?  There are a lot of other options.  We can drive ourselves.  Take a bus.  Or fly.  All of which are more cost efficient than a train.  A commuter jet, for example, can make three round trips in the time it takes a train to make one trip.  One-way.  So that’s six revenue-producing trips for the commuter jet versus one for the train.  Which is a big reason passenger airlines can be profitable while Amtrak cannot.

Trains require an enormous amount of infrastructure.  And a lot of people.  All of this just to move a few passengers.  Who don’t weigh much.  But require a lot of space for their weight.  So your typical passenger train doesn’t carry a lot of people.  To recover the full cost of moving a passenger train from point A to point B in the ticket price would require a ticket price far greater than anyone would pay.  Which is why the government subsidizes passenger rail.  Because no one would board a train otherwise.

The long-haul trains add porters, bartenders, food staff, wait staff, etc.  Greatly adding cost to a money losing route.  Making these trains the biggest losers.  In large part to those employee benefits.  For those employees on the train. And those not on the train.  To all of those who help get it from point A to point B.  And the insufficient number of revenue-producing trips these trains make to cover those costs.

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