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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Solar Farm dislocates Desert Tortoises – a Threatened Species

Posted by PITHOCRATES - February 15th, 2014

Week in Review

The problem with renewable energy sources is that they take up a lot of real estate.  To save the environment they must take a big footprint in that environment.  And big things cost a lot of money.  Such as solar farms.  Or wind farms.  Even though the ‘fuel’ is free.  Sun.  And wind.  Which is why free solar and wind power is some of the most costly power.  And if that wasn’t bad enough we also have to evict some of the indigenous life from their natural habitat (see Sunflower mirrors power California’s desert farm by Rowan Hooper posted 2/13/2014 on New Scientist).

IT TAKES a couple of seconds to work out what’s going on in this photo. You’re looking at a pair of heliostat mirrors – sunflower-like reflectors that turn to track the sun during the day. These are just two of hundreds of thousands such mirrors arranged in the Mojave Desert in California, all part of the Ivanpah solar power project.

Their job is to concentrate the sun’s rays onto boilers located on three central towers, turning water into steam that drives turbines. The site (below) covers 14 square kilometres and will produce at least 377 megawatts of electricity, not much below the summer output of a typical nuclear power station in the US and enough to power 140,000 homes in California…

The project has been controversial. Native American groups have objected, claiming it will impact burial grounds. The project was also held up while desert tortoises – a threatened species – were relocated away from the Ivanpah site. It highlights the fact that even renewable energy projects can have some adverse environmental impacts.

Hundreds of thousands of mirrors?  That must have cost a pretty penny.  I wonder what happens when the desert winds blow sand onto those mirrors.  Either making them dirty and less reflective.  Or dulling them by the natural sandblasting of the blowing sand that has worn away solid rock in the dessert.  Making them less reflective.  Requiring periodic cleaning of these mirrors.  And their replacement over time.  Thus making a very costly power generation system even more costly.

If we’re not hacking eagles to death with wind turbines we’re kicking another threatened species from its home.  Neither of which happens when we burn coal in a coal-fired power plant.  While there is only a theory that these coal-fired power plants are harming the wildlife on the planet it is a fact that renewable energy is.  So one can only conclude that wildlife like eagles and desert tortoises prefer coal-fired power plants over solar and wind power.  Which isn’t harming them.  As is evidenced by their being around after centuries of burning coal only to suffer harm from solar and wind power.

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President Obama’s 2014 State of the Union Address

Posted by PITHOCRATES - January 30th, 2014

Politics 101

Democrats offered Enthusiastic Applause for Unsound Policy Proposals that have no Basis in Reality

President Obama’s 2014 State of the Union address was a little longer than an hour.  But if you didn’t look at a clock it felt a lot longer.  For it was the same tripe you hear all the time from this administration.  And the political left.  It was full of misleading statements.  Inaccurate facts and figures.  And some lies.  The usual stuff you expect from the liberal left.  But what was really disturbing was the enthusiastic applause for some really unsound policy proposals that have no basis in reality.  Showing either how clueless these enthusiastic Democrats are about economics, business, national security, etc.  Or how amoral they are in their quest for power.  As they judge and implement policy not by how it will improve the lives of Americans.  But how it will improve their lives in government.

Some Big Reasons why Businesses export Jobs are Taxes, Regulations and Labor Costs

If there was ever an example of what people not to have in power this state of the union theater was it.  Following are excerpts from President Obama’s speech (see FULL TRANSCRIPT: Obama’s 2014 State of the Union address posted 1/28/2014 on The Washington Post).  Comments and analysis follow each excerpt.

And here are the results of your efforts: the lowest unemployment rate in over five years; a rebounding housing market — (applause) — a manufacturing sector that’s adding jobs for the first time since the 1990s — (applause) — more oil produced — more oil produced at home than we buy from the rest of the world, the first time that’s happened in nearly twenty years — (applause) — our deficits cut by more than half; and for the first time — (applause) — for the first time in over a decade, business leaders around the world have declared that China is no longer the world’s number one place to invest; America is.

The total number of people who left the civilian labor force since President Obama took office is 11,301,000 (see The BLS Employment Situation Summary for December 2013 posted 1/13/2014 on PITHOCRATES).  Which means the unemployment rate is meaningless.  The only reason why it’s falling is that the BLS doesn’t count unemployed people who gave up looking for jobs that just aren’t there.  Oil production on private land may be up.  While overall oil consumption is down because of the Great Recession that just won’t end.  Which is helping to keep gas prices down.  Unemployed people just don’t have the money to buy gas.  So they don’t.  Greatly reducing the demand for gas.  Thus reducing gas prices and oil imports.  George W. Bush’s last deficit was $498.37 billion.  President Obama’s first deficit was $1,539.22 billion.  And it was over $1 trillion in 2010, 2011 and 2012.  It fell to $680 billion in 2013 thanks to the sequester.  But the deficit is larger now than when President Obama assumed office.  The only reduction in the deficit is a reduction in the amount he increased it.

Now, as president, I’m committed to making Washington work better, and rebuilding the trust of the people who sent us here.

Really?  You’re committed to rebuilding the trust of the people?  Mr. “If you like your health insurance you can keep your health insurance.  Period.”  Otherwise known as the lie of the year.  You’re going to rebuild the trust of the people?  Good luck with that.  What with your pants on fire and all.

Today, after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled. The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by; let alone to get ahead. And too many still aren’t working at all.

Well, finally something Republicans can agree with the president about.  Yes, his economic policies have benefitted Wall Street.  While hurting Main Street.  Finally some bipartisan agreement.

So let’s make that decision easier for more companies. Both Democrats and Republicans have argued that our tax code is riddled with wasteful, complicated loopholes that punish businesses investing here, and reward companies that keep profits abroad. Let’s flip that equation. Let’s work together to close those loopholes, end those incentives to ship jobs overseas, and lower tax rates for businesses that create jobs right here at home. (Cheers, applause.)

There are only a few reasons why businesses export jobs.  And the big three are taxes, regulations and labor costs.  The Obama administration wants to raise taxes.  They’ve increased regulatory costs.  And they support costly union labor.  So everything they stand for encourages businesses to export jobs.

But — but I’ll act on my own to slash bureaucracy and streamline the permitting process for key projects, so we can get more construction workers on the job as fast as possible. (Applause.)

So how’s that approval for the Keystone XL pipeline coming along?  That thing you’ve been studying since 2010?  Which by the laws of arithmetic is approximately 4 years ago.  Is this slashing bureaucracy and streamlining the permitting process?  At this rate it would probably be quicker to elect a Republican president in 2016.  You know, someone who, when it comes to economic activity, walks it while the Democrats only talk it.

We also have the chance, right now, to beat other countries in the race for the next wave of high-tech manufacturing jobs. And my administration’s launched two hubs for high-tech manufacturing in Raleigh, North Carolina, and Youngstown, Ohio, where we’ve connected businesses to research universities that can help America lead the world in advanced technologies.

Universities are in the grant business.  They want as many grants as they can get to help bring money into the university.  And to do so they will study anything the government wants them to.  No matter how wasteful it is.  While some of the biggest high-tech companies started in garages.  Apple, Google, Hewlett Packard and Microsoft.  To name a few.  Yes, there is a lot of university-driven research.  But the big innovation is more entrepreneurial.  Created by people thinking up new stuff no one thought of yet.  Which is the last thing you want government involved in.  That same government that can’t build a website using 1990s technology.

Let’s do more to help the entrepreneurs and small business owners who create most new jobs in America. Over the past five years, my administration has made more loans to small business owners than any other. And when 98 percent of our exporters are small businesses, new trade partnerships with Europe and the Asia-Pacific will help them create even more jobs. We need to work together on tools like bipartisan trade promotion authority to protect our workers, protect our environment and open new markets to new goods stamped “Made in the USA.” (Applause.)

You want to help entrepreneurs and small business?  Get rid of Obamacare.  And slash tax rates.  This will provide incentive.  And allow them to reinvest more of their earnings to grow their business.  Allowing them to create those jobs.

Now, one of the biggest factors in bringing more jobs back is our commitment to American energy. The “all the above” energy strategy I announced a few years ago is working, and today America is closer to energy independence than we have been in decades. (Applause.)

‘All of the above’ as long as it isn’t coal, oil or nuclear.  But if it’s solar power and wind power they are committed to giving more tax dollars to their friends and bundlers in the green energy industry.

Meanwhile, my administration will keep working with the industry to sustain production and jobs growth while strengthening protection of our air, our water, our communities. And while we’re at it, I’ll use my authority to protect more of our pristine federal lands for future generations. (Applause.)

You can’t sustain production and jobs growth by strengthening protection of our air, water and pristine federal lands.  That’s just more regulatory costs.  And raising energy costs by not allowing any oil or natural gas production on those pristine federal lands.  Raising energy costs by restricting supply.  Which raises business costs.  In addition to those new regulatory costs.

Every four minutes another American home or business goes solar, every panel pounded into place by a worker whose job can’t be outsourced. Let’s continue that progress with a smarter tax policy that stops giving $4 billion a year to fossil fuel industries that don’t need it so we can invest more in fuels of the future that do. (Cheers, applause.)

That says it all.  Fossil fuels don’t need subsidies because their costs are affordable.  While solar (and wind power) are so costly that they are unaffordable.  Unless government heavily subsidizes them.

But the debate is settled. Climate change is a fact. (Applause.) And when our children’s children look us in the eye and ask if we did all we could to leave them a safer, more stable world, with new sources of energy, I want us to be able to say yes, we did. (Cheers, applause.)

There is no such thing as settled science.  Only science that has yet to be disproved.  Besides, once upon a time glaciers stretched down from the poles to near the equator.  And then receded back to where they are now.  All without any manmade carbon in the atmosphere to warm the planet.  As we were still simple hunter and gatherers then.  So if the glaciers moved more before there was manmade global warming they’ll move again regardless of what man is doing to warm the planet.

Finally, if we’re serious about economic growth, it is time to heed the call of business leaders, labor leaders, faith leaders, law enforcement — and fix our broken immigration system. (Cheers, applause.) Republicans and Democrats in the Senate have acted, and I know that members of both parties in the House want to do the same. Independent economists say immigration reform will grow our economy and shrink our deficits by almost $1 trillion in the next two decades. And for good reason: When people come here to fulfill their dreams — to study, invent, contribute to our culture — they make our country a more attractive place for businesses to locate and create jobs for everybody. So let’s get immigration reform done this year. (Cheers, applause.) Let’s get it done. It’s time.

Funny how that argument doesn’t apply to birth control and abortion.  The reason we need to “fix our broken immigration system.”  For if we were having babies at the rate when government created the welfare state we could pay for that welfare state today.  But thanks to the Sixties, birth control, abortion and feminism women stopped having babies.  Which is fine if a woman doesn’t want to.  But the progressives designed the welfare state based on them being baby machines.  Creating a greater number of taxpayers with each generation.  So more people pay into the welfare state than collect from it.  The way it must be for a Ponzi scheme to work.

That’s why I’ve been asking CEOs to give more long-term unemployed workers a fair shot at new jobs, a new chance to support their families. And in fact, this week many will come to the White House to make that commitment real.

When you raise the cost of labor (union labor, Obamacare, etc.) businesses tend to look at automating production instead of hiring that costly labor.  They may not be able to do anything about the higher regulatory costs but they can do something about higher labor costs.  Use more machines than people.  If you want CEOs to create new jobs stop making labor so costly.  And you can start with getting rid of Obamacare.

Of course, it’s not enough to train today’s workforce. We also have to prepare tomorrow’s workforce, by guaranteeing every child access to a world-class education. (Applause.)…

Five years ago we set out to change the odds for all our kids. We worked with lenders to reform student loans, and today more young people are earning college degrees than ever before. Race to the Top, with the help of governors from both parties, has helped states raise expectations and performance. Teachers and principals in schools from Tennessee to Washington, D.C., are making big strides in preparing students with the skills for the new economy — problem solving, critical thinking, science, technology, engineering, math.

Yes, more kids are going to college than ever before.  But they’re going there to have fun.  And to facilitate their fun many are getting easy, worthless degrees in the social sciences and humanities.  Costly degrees that universities sold them promising them future riches.  Enriching the university.  While impoverishing their graduates.  For a high-tech company has no use for these degrees.  Which is why a lot of these people end up in jobs they didn’t need that costly degree to do.  And our high-tech companies are using the visa program to get foreigners who have the skills they want.  Problem solving, critical thinking, science, technology, engineering and math.

It requires everything from more challenging curriculums and more demanding parents to better support for teachers and new ways to measure how well our kids think, not how well they can fill in a bubble on a test. But it is worth it — and it is working.

If you want kids to do better we need to champion marriage and family more.  And they should embrace religion a little more.  Instead of encouraging our young women to use birth control and abortion to avoid marriage and family.  And pulling every last vestige of religion from our lives.  Kids growing up in a household with a mother and a father who go to church do far better on average than kids growing up in a single-parent household and don’t go to church (see Strong families steeped in Conservative Values and Traditions do Well in America posted 1/11/2014 on PITHOCRATES).

Research shows that one of the best investments we can make in a child’s life is high-quality early education. (Applause.) Last year, I asked this Congress to help states make high-quality pre-K available to every 4-year-old. And as a parent as well as a president, I repeat that request tonight.

Actually, research doesn’t show that.  Yet they keep saying that.  For it’s like that line in the musical Evita, “Get them while they’re young, Evita.  Get them while they’re young.”  The sooner they can take them away from their parents the sooner they can start turning them into Democrat voters.  Such as teaching them to blame their parents for the manmade global warming that is killing the polar bears as they have no ice to rest on while eating their baby seals.

You know, today, women make up about half our workforce, but they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment.

Women deserve equal pay for equal work. (Cheers, applause.)

Actually, it’s closer to 91 cents (see The White House’s use of data on the gender wage gap by Glenn Kessler posted 6/5/2012 on The Washington Post).  And the small difference is not due to discrimination but personal choice.  When you look at aggregate wages women will make less than men.  Because more women are teachers (with 3 month off without pay) than men are.  Some women work fewer hours at work to spend more time with their children. While men tend to work more overtime.  Men also work the more dangerous and higher paying jobs.  And are more likely to belong to a union.  When you compare childless, single men and women with a college degree some women are actually earning more than men.  Figures don’t lie but liars figure.  And for the contortions the Obama administration did here The Washington Post’s The Fact Checker gave the president one Pinocchio.

Now, women hold a majority of lower-wage jobs, but they’re not the only ones stifled by stagnant wages. Americans understand that some people will earn more money than others, and we don’t resent those who, by virtue of their efforts, achieve incredible success. That’s what America’s all about. But Americans overwhelmingly agree that no one who works full-time should ever have to raise a family in poverty. (Applause.)

In the year since I asked this Congress to raise the minimum wage, five states have passed laws to raise theirs.

You’re not going to have a lot of upward mobility when you pay people more to remain in the jobs they hate.  All the talk about making college more affordable and bringing employers and community colleges together to help give people the skills they need to fill the jobs employers have is all for nothing if they just pay people more for doing an entry-level job.

Let’s do more to help Americans save for retirement. Today most workers don’t have a pension. A Social Security check often isn’t enough on its own. And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401(k)s. That’s why tomorrow I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA. It’s a — it’s a new savings bond that encourages folks to build a nest egg.

Once upon a time people opened a savings account at their local bank and they saved to buy a house.  And they saved for their retirement.  That’s how people saved when they didn’t have a pension or a 401(k).  They can’t do that today because of the Federal Reserve destroying the banking industry by keeping interest rates at zero.  If the Fed stopped printing money and let investment capital come from our savings like they did before the Keynesians gave us the Federal Reserve people would be saving like we once did.  And we’d stop having Great Depressions, stagflation and Great Recessions.  Created by their prolonging the growth side of the business cycle.  Which raises prices higher than they normally would go.  Making the contraction side of the business cycle that much more painful.  As those prices have a much longer way to fall than they normally would.  Thanks to the Fed’s meddling with interest rates.

MyRA guarantees a decent return with no risk of losing what you put in. And if this Congress wants to help, work with me to fix an upside-down tax code that gives big tax breaks to help the wealthy save, but does little or nothing for middle-class Americans, offer every American access to an automatic IRA on the job, so they can save at work just like everybody in this chamber can.

You know why they want these MyRAs?  Because they can’t stand people saving money.  They love Social Security.  Because they can borrow from the Social Security Trust Fund.  Which is what they will do with these MyRAs.  They will take this money and spend it.  Filling the MyRA Trust Fund with a bunch of IOUs.  Just like they do with the Social Security Trust Fund.  And then provide a retirement benefit like Social Security.  That is too small to live on.  Whereas if we saved the money ourselves our retirement nest-egg will be much larger.  And it will provide for our retirement.  Unlike Social Security.

And since the most important investment many families make is their home, send me legislation that protects taxpayers from footing the bill for a housing crisis ever again, and keeps the dream of homeownership alive for future generations. (Applause.)

It was Bill Clinton that set the stage for the subprime mortgage crisis with his Policy Statement on Discrimination in Lending (see Bill Clinton created the subprime mortgage crisis with his Policy Statement on Discrimination in Lending posted 11/6/2011 on PITHOCRATES).  Using the heavy hand of government to get lenders to qualify the unqualified.  Then the Fed’s artificially low interest rates were the bait for the trap.  Enticing people to borrow huge sums of money because those interest rates were just too good to pass up.  Even if they weren’t planning to buy a house to begin with. The subprime mortgage crisis and the resulting Great Recession were government made.  If we want to prevent the taxpayers from footing the bill for another housing crisis we need to get the Keynesians out of government.

Already, because of the Affordable Care Act, more than 3 million Americans under age 26 have gained coverage under their parents’ plans. (Applause.)

More than 9 million Americans have signed up for private health insurance or Medicaid coverage — 9 million. (Applause.)

The Washington Post gave this lie three Pinocchios (see Warning: Ignore claims that 3.9 million people signed up for Medicaid because of Obamacare by Glenn Kessler posted 1/16/2014 on The Washington Post).  For they’re counting some 3.9 million who would have signed up anyway for Medicaid regardless of the Affordable Care Act.  Also, the government was counting people who put a health care plan into their shopping cart as if they signed up for it.  Which many couldn’t.  As they haven’t programmed the back end of the health care website yet to actually accept payment or to pass that information on to the insurers.

And here’s another number: zero. Because of this law, no American, none, zero, can ever again be dropped or denied coverage for a pre-existing condition like asthma or back pain or cancer. (Cheers, applause.) No woman can ever be charged more just because she’s a woman. (Cheers, applause.) And we did all this while adding years to Medicare’s finances, keeping Medicare premiums flat and lowering prescription costs for millions of seniors.

That’s right.  Women with reproductive systems that men don’t have won’t pay more for their health insurance than men pay for theirs.  How can they do that?  Simple.  They just are charging men more.  To cover the cost of a reproductive system they don’t have.

Citizenship means standing up for the lives that gun violence steals from us each day. I have seen the courage of parents, students, pastors, and police officers all over this country who say “we are not afraid,” and I intend to keep trying, with or without Congress, to help stop more tragedies from visiting innocent Americans in our movie theaters and our shopping malls, or schools like Sandy Hook. (Applause.)

If you take away guns from law-abiding gun owners that won’t keep dangerous people with mental health issues that want to harm people out of our movie theaters, our shopping malls or schools like Sandy Hook.  For there are other ways to harm people.  Just look at the Boston Marathon bombers.  The people he’s talking about not only had mental health issues but they were also smart.  Many were even college students.  Who probably could think of other ways to hurt people.  And you just can’t take away everything they might use to harm people.  But you can place these people somewhere where they can’t harm anyone.

You see, in a world of complex threats, our security, our leadership depends on all elements of our power — including strong and principled diplomacy. American diplomacy has rallied more than 50 countries to prevent nuclear materials from falling into the wrong hands, and allowed us to reduce our own reliance on Cold War stockpiles.

Since President Obama assumed office he did nothing to support the Green Revolution in Iran.  Which kept the hard-line Islamists in power there.  He gave Egypt to the Muslim Brotherhood by telling Hosni Mubarak that he had to go.  Removing the stable anchor of the Middle East.  And moved Egypt closer to Iran.  (The Egyptian people eventually rose up to overthrow the oppressive Muslim Brotherhood).  He went to war in Libya and helped to overthrow Colonel Muammar Qaddafi.  Who at the time was a quasi ally in the War on Terror.  After the Iraq invasion frightened him into believing he may be next.  President Obama was thanked for his Libyan war by al Qaeda with 4 dead Americans in Benghazi on the anniversary of 9/11.  He waited too long to act in the Syrian civil war.  Which only brought al Qaeda into the conflict.  He failed to attain a status of forces agreement in Iraq.  So he pulled all U.S. forces out of Iraq which has only invited al Qaeda in.  And it looks like this will be repeated in Afghanistan.  He blamed George W. Bush’s wars as recruitment tools for al Qaeda.  While his extensive drone use is doing the same thing.  Especially in Yemen.  The hotbed of al-Qaeda in the Arabian Peninsula.  All that his diplomacy and leadership has done was to make the world a more dangerous place.

American diplomacy, backed by the threat of force, is why Syria’s chemical weapons are being eliminated. (Applause.) And we will continue to work with the international community to usher in the future the Syrian people deserve — a future free of dictatorship, terror and fear.

His diplomacy with Bashar al-Assad in Syria only gave his oppressive regime legitimacy in the civil war he was raging against his people.  Making it easier for Assad to kill Syrians with conventional arms while he gives up a token amount of his chemical weapons.  While also making Russia who brokered the deal the dominate player in the region.

And it is American diplomacy, backed by pressure, that has halted the progress of Iran’s nuclear program — and rolled back parts of that program — for the very first time in a decade. As we gather here tonight, Iran has begun to eliminate its stockpile of higher levels of enriched uranium.

It’s not installing advanced centrifuges. Unprecedented inspections help the world verify every day that Iran is not building a bomb. And with our allies and partners, we’re engaged in negotiations to see if we can peacefully achieve a goal we all share: preventing Iran from obtaining a nuclear weapon. (Applause.)

All Iran is doing is pausing their program.  And chemically altering some of their enriched uranium to meet the requirements of this diplomatic deal.  But this chemical process is reversible.  And they will reverse it once they get what they want.  This deal makes the world no safer.  If anything it makes it more dangerous.  For it does not diminish the Iranian nuclear program in the least.  But gives them more time to work on it as they prop up their regime with much needed supplies thanks to a relaxation of the sanctions against them.

These negotiations will be difficult; they may not succeed. We are clear-eyed about Iran’s support for terrorist organizations like Hezbollah, which threaten our allies; and we’re clear about the mistrust between our nations, mistrust that cannot be wished away. But these negotiations don’t rely on trust; any long-term deal we agree to must be based on verifiable action that convinces us and the international community that Iran is not building a nuclear bomb. If John F. Kennedy and Ronald Reagan could negotiate with the Soviet Union, then surely a strong and confident America can negotiate with less powerful adversaries today. (Applause.)

The sanctions that we put in place helped make this opportunity possible. But let me be clear: if this Congress sends me a new sanctions bill now that threatens to derail these talks, I will veto it. (Applause.) For the sake of our national security, we must give diplomacy a chance to succeed.

The Soviet Union never attacked U.S. soil.  And there was a reason they didn’t.  They were rational.  And knew they would lose a great deal in a war with America.  Especially a nuclear one.  Which is why they never used their nuclear weapons.  But Iran giving a nuclear weapon to a shadowy group that is not a state?  With little to lose in using a nuclear weapon?  If it’s not a nuclear missile there will be no way in knowing where the nuclear bomb came from.  We can have our suspicions that Iran made it and gave it to someone.  But do we nuke Iran over that?  What if there are more nukes in the hands of al Qaeda, Hezbollah, al-Qaeda in the Arabian Peninsula, etc.?  You could nuke Iran back to the Stone Age but it won’t stop those others being used.  The president insists this will not happen as Iran signed an agreement.  The only problem with that is the Iranians are liars.  And they call the United States the Great Satan.   These two facts suggest that replacing those sanctions with a promise not to build nuclear bombs was probably not a wise trade.

But for more than two hundred years, we have put those things aside and placed our collective shoulder to the wheel of progress: to create and build and expand the possibilities of individual achievement; to free other nations from tyranny and fear; to promote justice and fairness and equality under the law, so that the words set to paper by our founders are made real for every citizen.

Use our collective shoulder to expand individual achievement?  The president believes in the former more than the latter.  He didn’t help the Iranians get free from tyranny when he had the chance.  And he turned the Egyptian people over to tyranny.  The Muslim Brotherhood.  Who were oppressing women and Christians.  Fairness and equality under the law?  Ask those Tea Party groups who were targeted by the IRS about fairness and equality under the law.  The Constitution?  That document of negative rights?  The left hates it.  And insists it’s a living document that can evolve over time to suit the needs of an expanding government.  So they can do exactly what the Founding Fathers wrote the Constitution to prevent from happening.

The Left endorses Unsound Policy Proposals with no Basis in Reality to improve their Chances of Winning Elections

The country is more conservative than liberal (see Liberal Self-Identification Edges Up to New High in 2013 by Jeffrey M. Jones posted 1/10/2014 on Gallup).  Which is why liberals want state-funded pre-K to start indoctrinating our children as soon as possible.  To get them away from their parents so they can begin the process of turning them into Democrat voters.  It’s why kids are getting worthless social science and humanities degrees.  To further indoctrinate them.  Because their views are minority views.  So they need to play loose with the facts.  And lie.  Which is easier to do with indoctrinated kids than educated adults.  You’ll even hear Democrats talk about lowering the voting age.  To get a few more years of voting out of these kids before they grow old and wise.  And begin voting conservative.  So they do what they can to dumb down education.  Lie.  Cheat.  And buy as many votes as they can by giving away free stuff.  And the thing they really want to give away is citizenship for illegal aliens.  Who they are sure will be forever grateful.  And show it by voting Democrat.

This explains the enthusiastic applause for unsound policy proposals that have no basis in reality.  For the left is not interested in improving the lives of Americans.  They just want to improve their chances of winning elections.

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Wind Power for the People and Fossil Fuel for Gold Mines and Hospitals

Posted by PITHOCRATES - December 1st, 2013

Week in Review

Energy firm RWE just backed out of a £4 billion ($6.6 billion) offshore wind farm.  The Atlantic Array project in the Bristol Channel.  Because of higher than expected costs.  And lower than expected government subsidies.  Meanwhile a new power plant was delivered in the Dominican Republic this year.  A nation that shares an island with Haiti surrounded by the Atlantic Ocean and the Caribbean Sea.  With a lot of sea wind to spin wind turbines.  Just as they filled the sails of the colonial powers’ ships centuries ago.  But they didn’t build a wind farm (see Quisqueya I & II, Dominican Republic posted on Wärtsilä).

Sometimes, one plus one does not equal two. The 25,000 inhabitants of Quisqueya, a small town close to San Pedro de Macorís, in the Dominican Republic, know so.

In September 2011, Barrick Gold Corporation acquired a majority share in a soon-to-be-opened gold mine, some 100 kilometres away from the Dominican capital, Santo Domingo. As soon as the mining company understood the needs of their new power-hungry mine, they decided to place an order for a state-of-the-art Wärtsilä power plant. The way in which Barrick, its host country and Wärtsilä would cooperate for the greater good came to exceed the initial expectations of any of the three involved parties and strike gold in an unforeseen way.

The Quisqueya project is a rare combination of two power plants. Due to clever project design it satisfies not only the gold mine’s power needs, but also those of the local population, who often deals with blackouts and an unstable power grid. The dual function came to be as the largest utility in the country, EGE Haina, decided to jump on the boat of efficient and  reliable power generation, turning the initial project to a synergetic effort where the total value exceeds the sum of its parts.

While Quisqueya I is owned and used by Barrick Gold, its twin sister Quisqueya II is run by EGE Haina. Although ordered by different parties, the plants are being built on the same site and together form the largest power plant complex in the world ever delivered by Wärtsilä at the time of the order, setting a new standard for the 21st century power plants. As an outsider, you cannot clearly draw a line between the power supplied to the mine and that supplied to the local community, nor between the corporate profit and the social one. Quisqueya I & II is a beautiful example of how a sensible and responsible utilization of natural resources can directly improve a community’s way of life.

Both Quisqueya plants will feature Wärtsilä Flexicycle™ combined cycle technology and operate on 12 Wärtsilä 50DF dual-fuel engines each. The primary fuel is to be natural gas with liquid fuel as back-up, and the combined output from the two plants will be 430 MW. Wärtsilä’s scope of supply for the Quisqueya power plant includes full engineering, procurement, and construction (EPC). The power plant will have a net efficiencyof 48 %, which is an astonishingly high figure in tropical conditions, with soaring humidity and temperatures above 35°C.

Lucky are the people living near this power-hungry gold mine.  Because it gets top of the line electric power.  That furnished by fossil fuels.  Which can burn no matter what the winds are doing.  Keeping this gold mine in operation.  And giving the people around it reliable electric power.  And if the winds stop blowing these people will still have their power.  And if a hurricane blows through it may down some power lines.  Which can be replaced to restore electric power.  Whereas if a hurricane takes out an offshore wind farm power will be out a lot longer.  Either until they rebuild those very expensive wind turbines (probably requiring huge green tariffs to cover the costs of building this wind farm twice).  Or until they build a new power plant that uses a fossil fuel.

Interesting when a power plant is to power a million homes like the Atlantic Array project in the Bristol Channel a government looks to spend $6.6 billion for unreliable power.  But when a power plant is furnishing something that produces revenue and economic output they don’t build a wind farm power plant.  No, when they need to count on that electric power to be there they turn to fossil fuels.  For the same reason hospitals don’t put wind turbines on their roof for backup electric power during a blackout.  They use backup generators that burn a fossil fuel.  Because they need to count on that electric power to be there.

Fossil fuel is reliable.  While wind power is not.  Which is why governments use fossil fuels for gold mines and hospitals.  And wind power for the people.  Because governments can screw the people to meet silly green power targets with little blowback.  Because, hey, it’s for the environment.

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Nuclear Power is Green but Governments prefer Wind Power because its More Costly

Posted by PITHOCRATES - November 30th, 2013

Week in Review

To save the world from global warming we have to go to a low-carbon energy economy.  Say goodbye to coal.  And hello to solar.  And wind (see Energy firm RWE npower axes £4bn UK windfarm amid political uncertainty by Terry Macalister posted 11/25/2013 on The Telegraph).

Britain’s green ambitions have been dealt a blow as a big six energy company has pulled the plug on one of the world’s largest offshore windfarms, with the political storm enveloping the industry threatening the multibillion-pound investments needed to meet emissions targets and head off a looming capacity crunch.

Weeks after warning that the government was treating environmental subsidies as a “political football”, the German-owned RWE npower is pulling out of the £4bn Atlantic Array project in the Bristol Channel because the economics do not stack up.

The move comes as figures show that energy firms reaped a 77% increase in profits per customer last year, due to bill increases that the big six say are partly due to government green levies…

The Renewable Energy Association (REA), which lobbies for more low-carbon power, said government infighting over subsidies was causing deep uncertainty in the industry…

“We need assurances from George Osborne in the autumn statement about where we stand,” said a spokesman for the REA. “Nick Clegg says one thing about the green levies, Michael Fallon [the energy minister] another…”

RWE indicated that the government might have to raise green subsidies – and thus increase bills or the burden on the taxpayer – after admitting that technical difficulties had pushed the price up so far that it could not be justified under the current subsidy regime.

But RWE has already pulled out of a £350m nuclear-power project, is selling its DEA North Sea oil business and last week disposed of part of its UK gas and electricity supply arm. Developers have been warning for some time that they would need more subsidies from the government if ministers were to realise low-carbon energy targets.

RWE was in partnership to build that nuclear project.  Which cost in total £696m.  Or 17% of the cost of the £4bn Atlantic Array project in the Bristol Channel.  Which they say will power one million homes.  Of course, that would be only when the wind is blowing.  But not blowing too fast.  For there is a small window for safe wind speeds these turbines can generate power at.  Giving them a low capacity factor (the amount of power they could produce over a period of time at full nameplate capacity and the actual power they produced over that period).  About 30% in Britain.  Whereas nuclear power is about 90%.  Which is why we use it for baseload power.  Because it’s always there.  Even when the wind is blowing too slow.  Or too fast.  So that Atlantic Array wasn’t going to provide reliable power for a million homes.  In fact, on a calm day it will provide no power to any home.  Which begs the question why spend £4bn for unreliable power when you can spend £696m for reliable power?

Worse, wind power requires government subsidies.  So much that companies won’t build wind farms unless they get government subsidies.  Something you don’t need to build a nuclear power plant.  And to rub salt in an open wound those subsidies are paid for with levies on the family utility bill.  Or higher taxes.  Forcing these families to get by on less.  While these green energy firms are seeing rising profits.  Because of the money the government takes from the households and gives to the green energy firms in the form of subsidies.  Which begs another question.  Why charge the British people so much more for clean energy when they can get it for far less from nuclear power?  At 17% of the cost for the Atlantic Array project?

When it comes down to it renewable energy is crony capitalism at its worst.  Huge transfers of money from the private sector to the public sector.  Where they turn around and give to their friends in green energy companies in the form of lucrative contracts and fat subsidies.  After taking some off the top for their expenses, of course.  If it wasn’t they’d be building less costly and more reliable nuclear power plants to be green.  Instead of building these green elephants all over the place.

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A Renewable Boom means more Expensive and Less Reliable Electric Power

Posted by PITHOCRATES - October 20th, 2013

Week in Review

The news on our green energy initiatives sounds good.  We’re importing less oil.  And adding more and more wind power.  If you’re a proponent of green energy you no doubt are pleased by this news.  But if you understand energy and economics it’s a different story.  You’ll think the country is moving in the wrong direction.  Ultimately raising our energy costs.  Without making much of an impact on carbon emissions.  And just because we are exporting gasoline doesn’t mean we’re on the road to being energy self-sufficient (see The Renewable Boom by Bryan Walsh posted 10/11/2013 on Time).

Earlier this year, the U.S. became a net exporter of oil distillates, and the International Energy Agency projects that the U.S. could be almost energy self-sufficient in net terms by 2035.

This is not necessarily a good thing.  Being a net exporter of oil distillates.  It means that US supply exceeds US demand at the current market price.  That’s an important point.  The current market price.  The US has been in an anemic economic recovery—though some would say we’re still in a recession—since President Obama assumed office.  During bad economic times people lose their jobs.  Those who haven’t are worried about losing theirs.  And they worry about the uncertainty, too, about the cost of Obamacare.  So people are driving less.  And they are spending less.  Because they have less.  And worry about how much money they’ll need under Obamacare.  So they’re not taking the family on a cross-country vacation.  Some are even spending their vacation in the backyard.  The so called ‘staycation’.  No doubt the 10 million or so who disappeared from the labor force since President Obama assumed office aren’t driving much these days.  So because of this US demand for gasoline is down.  And, hence, prices.   Even though gasoline prices are still high and consuming an ever larger part of our reduced median family income (also down since President assumed office), gasoline prices are higher elsewhere.  Which is why refineries are exporting their oil distillates.  To meet that higher demand that has raised the market price.

But the biggest source of new electricity in the U.S. last year wasn’t a fossil fuel. It was the humble wind. More than 13 gigawatts of new wind potential were added to the grid in 2012, accounting for 43% of all new generation capacity. Total wind-power capacity exceeded 60 gigawatts by the end of 2012—enough to power 15 million homes when the breeze is blowing.

These numbers do sound big for wind.  Like it’s easy sailing for wind power to replace coal.  But is it?  Let’s look at the big picture.  In 2011 the total nameplate capacity of all electric power generation was 1,153.149 gigawatts.  So that 13 gigawatts though sounding like a lot of power it is only 1.127% of the total nameplate capacity.  Small enough to be rounding error.  In other words, that 13 gigawatts is such a small amount of power that it won’t even be seen by the electric grid.  But it gets even worse.

We used the term ‘nameplate capacity’ for a reason.  This is the amount of power that this unit is capable of producing.  Not what it actually produces.  In fact, we have a measure comparing the power generation possible to the ‘actual’ power generation.  The capacity factor.  Which measures power production over a period of time and divides it by the total amount of power that the unit could have produced (i.e., its nameplate value).  Coal has a higher capacity factor than wind because coal can produce electric power in all wind conditions.  While wind power cannot.  If the winds are too strong the wind turbines lock down to protect themselves.  If the wind is blowing too slowly they won’t produce any electric power.

The typical capacity factor for coal is 62.3%.  Meaning that over half of the installed capacity is generating power.  Some generators may be down for maintenance.  Or a generator may be shut down due to weak demand.  The typical capacity factor for wind power is 30%.  Meaning that the installed capacity produces no power 70% of the time.  And it’s not because turbines are down for maintenance.  It’s because of the intermittent wind.

So coal has twice the capacity that wind has.  Does this mean we need twice the installed capacity of wind to match coal?  No.  Because if you tripled the number of wind turbines in a wind farm they will still produce no power if the wind isn’t blowing.  In this respect you can say coal has a capacity factor of 100%.  For if they want more power from a coal-fired power plant they can bring another generator on line.  Even if the wind isn’t blowing.

You could say wind power is like parsley on a plate in a restaurant.  It’s just a garnishment.  It makes our electric power production look more environmentally friendly but it just adds cost and often times we just throw it away.  For if coal provides all our power needs when the wind isn’t blowing and the wind then starts blowing you have a surplus of power that you can’t sell.  You can’t shut down the coal-fired power plant because the wind turbines don’t produce enough to replace it.  You can’t shut down the wind turbines because it defeats the purpose of having them.  So you just throw away the surplus power.  And charge people more for their electric power to cover this waste.  Like a restaurant charges more for its menu items to cover the cost of the parsley the people throw away.

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Green Energy Policies raise the Cost of Heating this Winter in the UK

Posted by PITHOCRATES - October 19th, 2013

Week in Review

You can either fight ‘manmade’ global warming or you can have low energy prices.  But you can’t have both (see British Gas to raise prices by 9.2% posted 10/17/2013 on BBC News Business).

British Gas is to increase prices for domestic customers, with a dual-fuel bill going up by 9.2% from 23 November.

The increase, which will affect nearly eight million households in the UK, includes an 8.4% rise in gas prices and a 10.4% increase in electricity prices.

The company said it “understands the frustration” of prices rising faster than incomes. The average annual household bill will go up by £123 [$198.89]…

The company said that the cost of buying energy on the global markets, delivering gas and electricity to customers’ homes, and the government’s “green” levies, were all factors in the decision to put up prices.

With a focus on renewables we bring fewer fossil fuels to market.  Coal, oil and natural gas.  And with the war against clean nuclear power we’re shutting down our reactors.  So instead we focus on the more costly wind and solar power.  Because it takes a lot more costly infrastructure to capture the ‘free’ energy from the sun and the wind.  So much that the taxpayer has to subsidize them.  To bring us that ‘free’ energy.  When the sun is shining and the wind is blowing, that is.  Which brings us to that costly distribution system.

People can put solar arrays on their home to use that ‘free’ solar power during sunny days.  But what about cloudy days?  And night?  Wind farms can generate ‘free’ wind power when the winds are blowing right.  But what about when they are not blowing right?  Either too fast?  Too slow?  Or not at all?  What then?  Fossil fuels.  That’s what.

Baseload power (typically coal that takes hours to bring on line) is a funny thing.  To be cost effective power plants run at full capacity 24/7.  When demand rises they can bring on some ‘peaker’ units (typically gas that are quick to bring on line) to add additional capacity.  So power companies have to maintain baseload power even if the people aren’t buying any to be available when solar and wind aren’t.  And if all the homes disconnected from the grid and ran on solar power during the day the power companies would still have to keep them physically connected to the grid.  So these homes can use their power at night.

This is why energy prices are rising.  Revenue at power companies are falling due to that ‘free’ wind and solar power while their expenses are not.  And because they are selling to fewer customers they have to charge them more to cover their expenses.

Affordable energy for the people lies with fossil fuels.  Not renewables.  Governments have to choose.  All the people.  Or their liberal base.  Less costly power from fossil fuels.  Or more costly power from renewables.  It’s that easy.  For you can fight ‘manmade’ global warming or you can have low energy prices.  You just can’t have both.

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Wind Turbines versus a Coal-Fired Power Plant

Posted by PITHOCRATES - August 26th, 2013

Economics 101

The Diameter of a 6 Megawatt 3-Blade Rotor is Greater than two 747-400s parked Wingtip to Wingtip

One of the largest coal-fired power plants in the world is in Macon, Georgia.  Plant Scherer.  Whose furnaces consume some 31,000 tons of coal a day.  Producing 3,500 megawatts of electric power.  Enough to power three good sized American cities.  A few million households.

One of the largest offshore wind turbines available on the market is 6 megawatt.  Which is huge.  One blade can be as long as 250 feet.  A typical 3-blade rotor can have a diameter of just over 500 feet.  To get a feel of this magnitude the wingspan of the world’s most common jumbo jet, the Boeing 747-400, is about 211 feet.  Which means one blade of a 6 megawatt wind turbine is longer than the wingspan of a Boeing 747-400.  And the diameter of a 3-blade rotor is greater than two 747-400s parked wingtip to wingtip.

A 6 megawatt wind turbine requires a tower of about 300 feet tall.  So the blades can spin without hitting the ground.  Which is about the same height of a 20 story building.  And if it’s an offshore turbine you can add another 2 stories or so for the tower below the surface of the water.  So these things are big.  And tall.  Some of the largest manmade machines built.  And some of the most costly.  It takes a huge investment to install a 6 megawatt wind turbine.  That can only produce 0.171% of the electric power that Plant Scherer can produce.

There is a Small Window of Wind Velocities that we can use to Generate Electric Power with Wind Turbines

So how many 6 megawatt turbines does it take to match the power output of Plant Scherer?  Well, to match the nameplate capacity you’ll need about 584 turbines.  If we install these offshore in a line that line would extend some 56 miles.  About an hour’s drive time at 55 mph.  Which is a very long line of very large and very costly wind turbines.

We said ‘nameplate capacity’ for a reason.  If 584 wind turbines were spinning in the right kind of wind they could match the output of Plant Scherer.  And what is the right kind of wind?  Not too slow.  And not too fast.  These turbines have gear boxes to speed up the rotational speed of the rotors.  And they vary the pitch of the blades on the rotors.  So the turbine can keep a constant rotational input to the electric generator.  If the wind is blowing slower than optimum the blades can catch more air to spin faster.  If the wind is blowing pretty strong the blades will turn to catch less air to spin slower.

In other words, there is a small window of wind velocities that we can use to generate electric power with wind turbines.  Too slow or no wind at all they produce no power.  If the wind is too great the blades turn parallel to the wind.  So the wind blows across the blades without turning them.  They also have brakes to lock down the rotors in very high winds to prevent any damage.  So if a storm blows through 584 offshore turbines they’ll produce no electric power.  Which means they can’t replace a Plant Scherer.  They can only operate with a Plant Scherer in backup.  To provide power then the winds just aren’t right.

The more Wind Turbines we install the more Costly our Electric Power Gets

Now back to that nameplate capacity.  This is the amount of power a power plant could produce.  It doesn’t mean what it will produce.  The capacity factor divides actual power produced over a period of time with the maximum amount of power that could have been produced.  A coal-fired power plant has a higher capacity factor than a wind turbine.  Because they can produce electricity pretty much whenever we want them to.  While a wind turbine can only produce electricity when the winds are blowing not too slow and not too fast.

So, if the winds aren’t blowing, or if they’re blowing too strongly, it is as if those wind turbines aren’t there.  Which means something else must be there.  Something more reliable.  Something that isn’t weather-dependent.  Such as a Plant Scherer.  In other words, even if we installed 584 turbines to match the output of Plant Scherer we could never get rid of Plant Scherer.  Because there will be times when those windmills will produce no power.  Requiring Plant Scherer to produce power as if we never had installed those wind turbines.  And because it takes time to bring a coal-fired power plant on line it has to keep burning coal even when the wind turbines are providing power.  So it can be ready to provide power when the windmills stop spinning.

Wind may be free but 584 wind turbines cost a fortune to install.  And this investment is in addition to the cost of building, maintaining and operating a coal-fired power plant like Plant Scherer.  All of which the consumer has to pay for.  Either in their electric bill (adding a surcharge for ‘clean energy investments’).  Or in higher taxes (property tax, income tax, etc.) that pays for renewable energy grants and subsidies.  Which means the more wind turbines we build the poorer we get.  Because we have duplicate power generation capacity when a single power plant could have sufficed.

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Wind-Generated Electric Power is 2-3 times more Costly than Coal-Generated Electric Power

Posted by PITHOCRATES - August 25th, 2013

Week in Review

A lot of people think wind-generated electric power is free.  Because the wind is free.  But wind-generated electric power is not free.  Wind turbines are very expensive.  And you need a lot of them to produce enough electric power that is useful.  Making it more expensive than the old-fashioned power we once knew and loved.  That generated from coal-fired power plants.  And it’s not a little more expensive.  It’s a lot more expensive (see Offshore wind costs will fall if development continues by EDI Editor posted 8/23/2013 on EDI).

Now a study commissioned by the German Offshore Wind Energy Foundation, along with Siemens and other companies in the industry, has concluded that the cost of electricity from offshore wind can be reduced by about one-third over the next decade if development continues consistently. At present the cost of electricity produced by offshore wind is approximately three times the cost of conventionally produced power, so reducing costs is essential if widespread adoption is to happen…

In analyzing the projected cost development of electricity generated from offshore wind, the study concluded that costs could be reduced by about 31 per cent, assuming stable market development, reaching at least 9 Gigawatt installed capacity in Germany by 2023.

All right, wind-generated electric power costs three times as much to produce than conventionally produced power.  Such as from a coal-fired power plant.  But in a very rosy ‘best case’ projection where the economy is strong and there are great advancements in the technology of wind power they can bring the cost of wind-generated electricity down one third.  So it is only twice as costly as conventionally produced power.

So we will pay a premium for any electric power generated from wind turbines.  At worst it may triple electric power costs.  At best it may only double its cost.  Which is the last thing any of us want to hear as we struggle through the worst economic recovery since that following the Great Depression.  So why do it?

To save the planet, of course.  As the global warming fundamentalists warn us the end times will come unless we fall to our knees and affirm our belief in global warming.  And agree to pay 2-3 times more for our electric power to absolve us of our global warming sins.  And not to listen to the ‘factsayers’ who tell us the data shows the planet is NOT warming.  For Al Gore sayeth it is.  And he should know.  For he became a very rich man proselytizing people to the global warming faith.  Hallelujah.

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Spain’s Massive Investment in Solar Power has Greatly increased the Cost of their Electric Power

Posted by PITHOCRATES - August 24th, 2013

Week in Review

People think renewable energy is the answer to all our energy problems.  But that isn’t quite so.  In fact, all it does is increase the cost of our electric power.  For sunshine and wind may be free.  But the equipment to harness the energy in sunshine and wind is not free.  It is very, very expensive.  And you need a lot of it.  You will not see one wind turbine service the power needs of one metropolitan area.  You may see a wind farm providing a small percentage of the electric power needs of a large metropolitan area.  And only when the wind blows.

Wind can blow day or night.  But it can also NOT blow day and night.  While solar panels will not work at all at night.  So you have massive investments to install renewable energy generation capacity.  And there will be times when they will provide no power.  So what do you do?  What do you do when the wind doesn’t blow and the sun doesn’t shine?  You turn to old reliable.  The electric grid.

This is why renewable energy is so costly.  It cannot replace our fossil-fuel power plants that can provide reliable power day or night in any type of weather.  It can only supplement what we call our baseload power.  Like our beloved coal-fired power plants.  One of the most cost-efficient ways to produce reliable electric power.  Which the power companies have to still run and maintain day and night.  For those who don’t have a wind turbine or a solar array providing their electric power.  And to light up the night.  So instead of one cost-efficient power generation system we have two systems.  One cost-efficient and one cost-inefficient.  And those who invested heavily into renewable energy are now having to deal with these very real problems (see Out Of Ideas And In Debt, Spain Sets Sights On Taxing The Sun by Kelly Phillips Erb posted 8/19/2013 on Forbes).

With so much sunshine at its disposal, Spain has aggressively pursued the development of solar energy: over the past ten years, the government has made significant advances in pressing solar energy and is one of the top countries in the world with respect to installed photovoltaic (PV) solar energy capacity.

It might, however, be too much of a good thing. Spain is generating so much solar power, according to its government, that production capacity exceeds demand by more than 60%. That imbalance has created a problem for the government which now finds itself in debt to producers. And not by a little bit. The debt is said to have grown to nearly 26 billion euros ($34.73 billion U.S.).

So how do you get out of that kind of debt? You propose incredibly onerous taxes and fines, of course. And you do it on exactly the behavior that you encouraged in the first place: the use of solar energy panels. That’s right. Spain is now attempting to scale back the use of solar panels – the use of which they have encouraged and subsidized over the last decade – by imposing a tax on those who use the panels…

…many residents in Spain generate enough electricity from solar that they get paid to selling the excess energy back to producers. This, it turns out, is a problem. The government is putting a stop to that, too: as part of the reform efforts (read: desperate measures), there will be a prohibition on selling extra energy.

If the power companies are providing all the power at night they have to maintain their power plants.  And their power distribution system.  Which means they even have to trim the trees away from their overhead power lines from people who use solar power during the day.  Nothing changes for the power companies.  Except that they can’t sell as much power as they once did.  So their costs of producing power remain the same.  But their revenue has fallen.  Forcing them to operate at a loss.  Or find other ways to replace their lost revenue.  Which they have to.  Because they must have the same capacity available during the day that they have at night.  Even if they aren’t selling as much power during the day as they are at night.  And the last thing they want to do is buy excess power back from homeowners with solar panels on their house when they’re producing their own power that they can’t sell.

Baseload power plants like coal and nuclear take time to bring on line.  They have to produce the heat that boils water into steam.  Then superheat the steam to remove all water from it.  So the steam can spin the generator turbines without damaging the vanes on the turbine.  And once they start these plants up they run these systems at full capacity where they produce power most cost-efficiently.  During peak demand they may bring on some gas-fired turbines that can start and produce power quickly.  And add them to the grid.  When the peak subsides they can shut down these gas-fired turbines and let the baseload generation carry the remaining load.

The Spanish government invested heavily into solar power for whatever reason.  It’s ‘free’ power.  It’s ‘clean’ power.  Or it was just a good way to create a lot of jobs.  But what Spain has now is a surplus of peak power generation during the day that doesn’t eliminate the need to maintain baseload power generation during the day.  Creating a surplus of electric power during the day no one wants.  While requiring power companies to maintain their baseload power during the day so they can provide power at night.  Incurring great costs on the power companies.  Which must be passed on to the same people who paid for the renewable energies subsidies.  The electric power consumer.

This is a classic example of a Hayekian malinvestment.  Friedrich Hayek of the Austrian school of economics said this is what happens when governments interfere with free markets.  They make investments to produce what they think is best while the market demands something else.  The market demanded low-cost electric power.  Which baseload power plants (coal and nuclear) provided.  But the government intervened and subsidized the more costly solar power.  This bad investment—or malinvestment—has only increased the cost of electric power for the Spanish consumer.  And now the Spanish have a big problem on their hands.  What to do with this surplus of peak power no one wants to pay for?  And how to replace the lost revenue of the power companies so they can cover their costs?  Two problems they didn’t have until the government intervened into the free market.

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