October 17, 2012

Green Energy seems to benefit only those with political connections UPDATED

The problem with most green energy programs is that they can't compete in the free market and so require government subsidies.

Charles Lane in The Washington Post, Liberals' green-energy contradictions.

Al Gore is about 50 times richer than he was when he left the vice presidency in 2001. According to an Oct. 11 report by The Post’s Carol D. Leonnig, Gore accumulated a Romneyesque $100 million partly through investing in alternative-energy firms subsidized by the Obama administration.
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Consider California’s “net metering” subsidy for solar-panel users. As the New York Times reported in June, the program hugely benefits well-off consumers who can afford to install photovoltaic panels. They get sun power for their homes — plus an excess supply that utilities must buy. Thus utilities must also pay to keep them on the grid. Those costs get passed along to everyone else — including low-income customers.

For a sense of where this may lead, look at Germany, whose crash program to replace nuclear power with wind and solar is boosting electricity rates. Der Spiegel reports that 200,000 long-term unemployed lost power in 2011 because they couldn’t pay their electric bills.

Like this company specially singled out by President Obama in 2010,  ABC “Advanced” battery maker A123 (which has posted losses for 14 consecutive quarters) has filed for bankruptcy. The company, which received a $250 million federal grant in 2009, was supposed to build the batteries that would power the giant fleet of electric cars that President Obama promised us would soon be on the road. Alas, it seems that’s not to be.

UPDATE: Veronique de Rugy writes

A123 is the fifth prominent clean-energy firm the Obama administration subsidized with loans or grants that has filed for bankruptcy protection, joining solar firms Solyndra and Abound Solar, energy firm Beacon Power, and battery company Ener1.
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As Forbes’s contributor Lara Hoffmans reports, in spite of  turning a negative $1 billion ever since its founding in 2001, A123 had received $249 million in 2009 as part of the stimulus bill as well as another $125 million in tax credits from the state of Michigan. Also, [t]o ensure there was a market for A123’s batteries, American taxpayers (some of them unwittingly, some unwillingly) gave Fisker Automotive a $529 million loan to make cars that would use said batteries,”Hoffmans explains.
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The claim made by DOE that encouraging investment in green technology would create up to 5 million jobs is unlike to see the light of day. Based on the DOE data, we see that for the 1705 program alone, the $16 billion loan guarantee program created some 2,378 permanent jobs–jobs which are promptly lost when a company goes under.

The promise of 5,000,000  jobs in green technology; the reality 2378 jobs.

Posted by Jill Fallon at October 17, 2012 3:43 PM | Permalink