There is a place for solar and wind and tidal and wave energy. But intermittent and unpredictable sources as these all are cannot be used to satisfy our base load demands. If used – when available – to augment our conventional sources (mainly fossil fuels, hydro and nuclear power) they can play a very useful role – eventually – in reducing the cost of producing power. But this presupposes that they are competitive with conventional production. And they can be in specific situations and especially in remote locations or where grid power is limited.
But subsidies have rarely enabled new technologies to become commercially viable. They tend to isolate and preserve the developers of the new technology from commercial pressures and are usually counter-productive. By loading conventional fossil fuel sources with short-sighted and useless taxes and by providing hefty subsidies for building solar and wind power the electricity market has been distorted to a destructive and unsustainable extent. Two articles recently address the utter failure of the subsidy regime.
1. Agence-France Press June 23, 2013 00:31
Spanish downturn a disaster for green energy
Spain’s wind turbine manufacturers are laying off workers and farmers who installed solar panels are facing ruin as austerity policies afflict the long-coddled green energy sector.
Further cuts are expected this summer.
State subsidies to clean energy producers have already fallen by between 12 and 40 percent on average in recent years, industry analysts say.
They could fall by another 10-20 percent in a new energy sector reform expected mid-July, according to the Spanish media. ….
In the middle of the last decade when the economy was enjoying strong growth, Spain put a cap on the price of green energies and provided “fairly generous” subsidies, said Carlos Garcia Suarez, expert in the sector at the IE Business School. …..
2. The Commentator, 21 June 2013
The ‘Great Renewables Scam’ unravels
In many parts of northern Europe, wind and solar projects may be highly visible facts on the ground. But the headline economic fact behind renewable energy is, and always has been, its sheer and blatant “unsustainability”.
Energy insiders have long known that the notion of ‘renewable energy’ is a romantic proposition – and an economic bust. But it is amazing what the lure of guaranteed ‘few strings attached’ government subsidies can achieve. Even the Big Oil companies bought into the renewables revolution, albeit mostly for PR reasons. Like Shell, however, many quickly abandoned their fledgling renewable arms. Post-2008, they knew, the subsidy regimes could not last. Neither was the public buying into the new PR message.
Now it was just a question of time before Europe’s world leading pioneers of solar and wind power, Germany and the UK, decided they had had enough of the self-inflicted economic pain. And all the signs are – as Germany’s solar sector just went belly up and the UK is made aware of how much every wind job actually costs – that the slow implosion of the renewables revolution is under way.
The plain fact is that installing solar panels, especially in the northern hemisphere, makes about as much economic sense as Iran heading up a UN Human Rights Commission (which it has done by the way). Equally, the viability of windfarms has always been the renewables industry’s worst kept secret.
And yet, aided by aggressive and heavily-funded green lobbies, leftist social engineers, appalling journalism, naive politicians and unscrupulous opportunistic renewable energy entrepreneurs, wind turbines and the photovoltaic industry quickly became established facts on the ground, giving the appearance of economic ‘viability’. Why else would government back them using our cash? ……
… In Europe, Germany was a major green pioneer, especially regarding solar energy. The UK, being the windiest country in Europe, focused on wind power. In both countries, however – to mix metaphors – the wheels are fast coming off.
In June, the sun finally set on Germany’s solar sector with power companies, large and small, seeing their £21 billion investment in solar energy disappear into the ether. As one German commentator wryly observed: “the sun does send an invoice after all”.
By mid-June the German company Siemens announced it was winding down its solar division with a view to shutting down completely by next spring. Siemens had entered the solar thermal systems market when it bought the Israeli company Solel, believing market growth would be rapid. The gamble failed. Siemens lost around €1 billion.
In March, Bosch signalled its withdrawal from the solar cell and solar module market. Bosch board chairman Franz Fehrenbach, who had been behind the company’s push into solar energy since 2008 has further admitted that the German solar sector generally is “doomed to die”. Bosch will lose even more than Siemens, probably around €2.4 billion.
But it is the private investors who bore the full brunt of the loss as the former hot shots of the stock exchange, Germany’s SolarWorld and Q-Cells, among other solar companies, lost tens of billions in capital investment.
Meanwhile, in the UK, wind power is again making the headlines, but for all the wrong reasons. A new analysis of government and industry figures revealed that every UK wind industry job is effectively subsidized to the tune of £100,000 per year. In some cases it rises to £1.3 million per job. In Scotland, with its 230 onshore windfarms, the figure is £154,000 per job. Even if the highly optimistic maximum projection of 75,000 wind industry jobs by 2020 is realised the figure would only drop to £80,000.
But, as the Renewable Energy Foundation, a UK think-tank, has pointed out, to meet its EU obligation of providing 15 percent of its generated energy from renewable sources by 2020 – a ridiculously untenable goal – the lavish subsidies will need to rise still further to £6 billion per year. Neither do the figures take into account the cost to the country of an exodus of energy-intensive industries; a very real threat if green levies on energy bills continue to rise. European industry and power stations have already turned to burning millions of imported tonnes of American wood pellets in a desperate bid to keep costs down. And that, as has been reported, is to the detriment of fine forests in the US and a resultant impact on CO2 levels. ….