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Home » Commentary

It’s green power, not fossil fuels, that would collapse without subsidies

GOPUSA StaffStephen Moore, Washington Times Posted On 11:35 am June 18, 2018
19


All of a sudden everyone on the left wants “free markets in energy policy.” As someone who’s advocated for that for, oh, about three decades (let’s start by shutting down the Energy Department), this riff should be music to my ears. But is laissez faire energy policy really what liberals are seeking?

First, some context. A few weeks ago, liberal activists leaked a draft Trump administration directive that would order utilities to purchase coal and nuclear power as part of their energy mix in supplying electricity to homes and businesses. There are good arguments for and against this policy — I’m fairly neutral — but what was fascinating was the indignant response by those on the left who hate fossil fuels. “Crony capitalism!” they shrieked in unison. Listen to Catherine Rampell, an economic columnist at The Washington Post, who moaned that “Trump is wielding the power of the state to keep uncompetitive companies in business, and costing taxpayers and consumers lots of money in the process. … if that doesn’t count as ‘picking winners and losers,’ it’s hard to say what would.”

David Schissel of the left-leaning Institute for Energy Economics scolds President Trump by writing that nuclear and coal plants are “at risk because of the market-driven transition that is pushing the system toward other forms of fuel.”

The New York Times slammed the Trump plan as “a preposterous idea. Continuing to operate financially nonviable power plants and forcing grid operators to buy power they don’t need or want is an unacceptable governmental intrusion into the power market that, by one analysis, would needlessly cost consumers hundreds of millions of dollars.”

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Wait. This could cost hundreds of millions of dollars? That’s bad for sure, but have you ever in 20 years heard The New York Times rail against the hundreds of billions of dollars of subsidies for wind and solar power? I haven’t. For eight years the Obama administration’s energy policy was to try to bankrupt coal, oil and other fossil fuels through regulation, while enriching their renewable energy pals in Silicon Valley with lavish subsidies.

Does anyone remember Solyndra? That was the solar company that was going to revolutionize sun power, and it went bankrupt after the Obama administration lavished the firm with hundreds of millions of dollars. All told, $150 billion was pipelined into the green empire under George W. Bush and Barack Obama, and most of the money funded such fiascoes. But now Mr. Trump is the one who is accused of “picking winners and losers?” This would be like Stormy Daniels complaining there is too much attention paid to women’s appearance.

An even bigger farce is the idea that Adam Smith’s invisible hand of free-market forces is what is driving certain nuclear power and coal plants into bankruptcy. (Coal still provides five times more electric power than wind and solar combined.) Ms. Rampell of The Washington Post explains: “The reason these [coal and nuclear] plants are struggling, after all, is that they can’t compete with cheaper natural gas and (sic) renewables.” That’s half-true. Yes, $3 natural gas prices have revolutionized the electric power markets and driven down costs. By the way, leftists hate natural gas, too, because they hate fracking.

But the idea that renewables are “cheap” is a lie and those on the left know it. Yet no one in the media ever challenges them. Let’s be clear about an economic reality that environmentalists have spent four decades trying to hide: Without massive government subsidies, there would be no wind or solar energy to speak of. They are complete creatures of government favoritism, and after 30 years we still can’t cut the umbilical cord.

Consider how gargantuan the green energy subsidies are. First, wind and solar receive a tax credit that is basically a 35 percent-off coupon for the energy they supply with taxpayers picking up the tab. If coal or nuclear power got a 35 percent taxpayer subsidy for every kilowatt of electricity they supplied, they would be basking in profits. I helped write and negotiate the just-passed Trump tax bill. When we tried to get rid of the renewable energy tax credit (i.e., create a “free market in energy”), the green lobby went ballistic and told Republicans this would put much of the industry out of business.

The accompanying chart shows just how un-level the playing field is today. For every dollar that coal and nuclear power receive, wind power gets almost $5 of subsidy and solar receives about $20. This does not even include the biggest subsidy of all: About half the states have renewable energy standards requiring utilities to buy 20 percent to 30 percent of their power from wind and solar regardless of the price. What other industry in America has that kind of golden parachute?

My view is that in terms of assessing the merits of energy alternatives, we ought to have an insurance policy against brownouts and blackouts like California has suffered, and other nations as well, because of overdependence on intermittent power sources like wind and solar. We may regret shutting down reliable nuclear or coal plants that can’t be easily powered up again during storms, cold winters, or steamy-hot summer days when we need electricity the most.

In the meantime, enough hypocrisy from liberals who lecture us about bailouts and subsidies as if they were Milton Friedman disciples. There is nothing the renewable energy is more horrified of than a genuine free market in energy.

• Stephen Moore is an economic consultant with Freedom Works. He served as a senior economic adviser to the Trump campaign.

© Copyright (c) 2018 News World Communications, Inc.

—-

This content is published through a licensing agreement with Acquire Media using its NewsEdge technology.

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19 Comments

porthos
porthos
12:17 pm June 18, 2018 at 12:17 pm
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Hang in there! We are only about 20 years away from fusion power and next to zero point energy that’s the greenest of them all.

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    DrGadget
    DrGadget
    5:45 pm June 18, 2018 at 5:45 pm
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    Solar actually shows some promise, and will most likely be the only green power* that survives.

    * In enviro-whacko context.

    Real business is cut-throat. If solar succeeds, it will pull all the money out of wind power, ocean power, etc. There can be only one. Govt subsidies only delay the inevitable. There’s no future in wind.

    Solar is getting more efficient and cheaper to build. The real measure of success is years to payoff. If you put an expensive solar/battery farm on your roof and it takes 20 years to pay for itself then you’re a fool for buying it. But if it takes 1 year to pay for itself then you’re a fool for not buying it. There is a place in the middle where it’s questionable, which is where we are now.

    Any further improvements in solar will start the avalanche. People will rush to buy. As volume increases, economies of scale will force an eventual price drop. Then the holdouts will buy solar too. Solar could soon price all other energy out of the picture, including coal.

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      DrGadget
      DrGadget
      5:49 pm June 18, 2018 at 5:49 pm

      Once the price drops low enough, Africa will want to solarize. They have no real grid but plenty of sun. It’s the perfect place for solar. 2 billion customers there will cause more economies of scale and more price drops.

      Quality of life should skyrocket. Everyone has cheap clean abundant energy.

      Especially in America we won’t tolerate intermittent power. We’ll demand better batteries, which we’ll get as well. Realistically if you can store two weeks’ worth of energy, it should never run out. Maybe in rare cases like Hurricane Katrina but few others.

      All other forms of green energy will die and deservedly so.

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      ltuser
      ltuser
      11:28 pm June 18, 2018 at 11:28 pm

      Just look at how well solar worked for Solyndra..

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      vsnyder
      vsnyder
      1:27 am June 19, 2018 at 1:27 am

      The real problem with solar is storage, not generation (if you want firm power). Many people (Mearns, Shaner et al, Rodgers, …) have computed that for firm power from solar and wind, 400-500 watt hours storage per average watt of capacity is required (depending on your definition of “firm”). An all-electric American economy would need about 1,700 GWe average capacity, or about 680,000 GWe-hr storage (using the optimistic 400 figure). The Big South Australian Battery cost $50 million, and has 129 MWe-hr capacity, for a cost of $0.38 per watt hour of storage capacity. Assuming batteries must be replaced every five years, and multiplying the numbers, the result is more than three times total USA 2016 GDP for batteries alone EVERY YEAR! Solar and wind are a good match to desalination and charging car batteries, but a terrible match to hospitals and foundries. If the goal is to eliminate fossil fuels, and continue to have firm power, the only alternative is nuclear. Fortunately, we have an inherently-safe design that would consume the stuff we call “nuclear waste” — which is actually valuable 5%-used fuel. Read “Smarter Use of Nuclear Waste” and “Plentiful Energy.”

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Terry Gillham
elderal
2:11 pm June 18, 2018 at 2:11 pm
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Market-driven prices are the ONLY way business should be done. This laissez faire approach includes zero (unconstitutional) “rules and regulations” and zero (unconstitutional) “government incentives.”

Let there be wide open competition for best methods of generating energy and wide open completion for customers at whatever price the market will bear. The best company with the best ideas will win and the consumers will have the lowest possible price.

All of this with no involvement whatsoever by any government entity.

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    ltuser
    ltuser
    4:07 pm June 18, 2018 at 4:07 pm
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    We imo, still need SOME sort of regulation for safety and other concerns (like ensuring they are not dumping their waste near a water table etc)..
    THAT said, i do agree we need LESS government regulations on these companies. AND NO Incentives/subsidies.. THEY SHOULD succeed or fail on their OWN.

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    DrGadget
    DrGadget
    5:39 pm June 18, 2018 at 5:39 pm
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    If wind really is the best thing going, it should prove that point by removing the subsidy. In fact, why not tax wind power like they tax my gasoline?

    Because then nobody would build wind turbines. And that’s a good thing. Wind power is an expensive joke. Everyone involved in wind knows this.

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Doug Van Duker
Doug V
3:32 pm June 18, 2018 at 3:32 pm
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The last nuclear power plant built in the US went on line in the 1970s. As the owner of a vintage car, let me assure you that keep a relic on the road is NOT an economical endeavor.

There is not a nuclear power plant in the US that wouldn’t double in efficiency if these analogue & mechanical dinosaurs were to be replaced equipment running on current technology.

In the US, coal is giving way to cheaper natural gas; and that’s fine.

However; coal prices are being artificially inflated by regulations that go WAY beyond the mark at protecting the environment and solar & windmill power are being giving a totally undeserved passes on environmental issues: such as the disaster they cause bird habitats…and how the industry disposes of the toxic materials used to produce solar panels & photo-voltaic cells.

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    ltuser
    ltuser
    4:09 pm June 18, 2018 at 4:09 pm
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    [There is not a nuclear power plant in the US that wouldn’t double in efficiency if these analogue & mechanical dinosaurs were to be replaced equipment running on
    current technology.
    }

    In what manner? Computerizing it all?? have we not been hearing for years, about how our utilities are already SO VULNERABLE to hackers, cause of how computerized they are??

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      vsnyder
      vsnyder
      1:31 am June 19, 2018 at 1:31 am

      “Vulnerable to hackers” is not inherently from computerization, but rather from connecting the computers to the internet — and running Windows. Utilities should run more secure operating systems, and NOT connect power-plant computers to the network.

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      ltuser
      ltuser
      3:50 pm June 19, 2018 at 3:50 pm

      That is true, just being computerized is not the main issue, having everyblood thing connected to the internet is, BUT NO POWER PLANTS i know of, are ‘off the grid’ in respects to being NOT connected to the internet.. THEY Are all connected via the internet, so their owners/managers/staff can remotely log in and the like.. THAT IMO Is why i don’t want MORE of the same, cause you just KNOW THE SAME THING WILL happen with them.

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conservativeprof
conservativeprof
3:51 pm June 18, 2018 at 3:51 pm
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The left has put enormous resources into their green energy fantasy. From producer subsidies, consumer subsidies, energy mandates, government sponsored research and development, and relentless propaganda, the green energy army marches on. This army does not take prisoners. Its intention is to transform energy generation and usage completely for everyone except for the green energy generals.

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    DrGadget
    DrGadget
    5:30 pm June 18, 2018 at 5:30 pm
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    With “enormous resources” meaning the taxpayer.

    On the margins I could see some exceptions to the rule of not spending federal funds on technology. Sometimes it’s valuable. But most of this green stuff is nonsense parading as being good for the planet, while in reality it’s an eternal drain on the economy.

    With corn ethanol being the very worst of the very worst.

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conservativeprof
conservativeprof
4:06 pm June 18, 2018 at 4:06 pm
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The green energy army touts propaganda about economic viability of favored energy production. Simple analysis indicates the outrageous lies. Here is simple comparison of conventional energy generation and green energy generation.
– Conventional: generates dispatchable power with fuel mostly coming from domestic sources. A network of conventional plants needs some level of redundancy and over capacity to ensure reliable operation during peak energy usage and failures. Conventional energy plants can be located within reasonable distance of major population centers to reduce transmission capacity cost and energy loss.
– Green: generates intermittent power with no energy costs. Requires large amounts of geographic area in remote locations and large networks of costly (about 2 to 3 times cost of renewable plants) transmission capacity. Requires near 100% backup capacity to deal with variable power generation. Requires costly negative energy pricing to dump excess power generation, effectively a fuel charge. Negative energy pricing increases as renewable power generation reaches a saturation level, perhaps 20% to 30% of power generation needs.

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conservativeprof
conservativeprof
4:12 pm June 18, 2018 at 4:12 pm
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Here is the latest green energy fantasy touted by its propaganda army.

Augment renewable power plants with enormous battery capacity. The propaganda army claims that negative energy pricing and backup capacity will no longer be needed. However, renewable power generation capacity will need to be substantially increased to generate excess power that can be used when renewable power is not available. In addition, massive battery capacity is not currently available now and likely to be expensive when available. Battery capacity has its own negative impacts on the environment including massive mining of rare earth minerals (very dirty) and high disposal costs. The lifetime of batteries can be considered an energy cost eliminating the touted benefit of free energy.

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    DrGadget
    DrGadget
    5:37 pm June 18, 2018 at 5:37 pm
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    We’re going to need some form of baseload power, in case the sun isn’t shining and the wind isn’t blowing. I’m in favor of coal so long as there is sufficient exhaust scrubbing. Coal really is filthy, but it’s reliable. We’ve been using it for 200 years now in steam engines.

    Nuclear is by far the best and safest, even if you consider Chernobyl. Gen 4 reactors will consume “nuclear waste” as fuel, so imagine shipping spent uranium OUT of Yucca Mtn to power reactors. If for no other reason than to consume that nuclear waste, we need nuclear. Even if we perfect cold fusion or dilithium crystals. We need nuclear.

    Above that, I could see solar panels fixed on top of buildings for power. Roof acreage is otherwise wasted. That would somewhat offset peak power usage.

    Batteries are still a great idea, and people like Elon Musk are improving their efficiency all the time. They just aren’t a fix-all solution YET. Give it time.

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      ltuser
      ltuser
      11:31 pm June 18, 2018 at 11:31 pm

      Solar’s very viable in states like AZ, CA, Texas and the like, but not all of the states could benefit.

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vsnyder
vsnyder
1:38 am June 19, 2018 at 1:38 am
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The latest numbers I could find for US subsidies were from 2016, from http://www.eia.gov/analysis/requests/subsidy. Cents per kWh: Coal: 0.057; Gas: 0.060; Hydro: 0.146; Nuclear: 0.210; Wind: 3.533; Solar PV: 23.121. The average utility price in California is 15.34 cents/kWh. California adds 40% more to Solar PV subsidies, bringing the total subsidy to more than twice the average utility rate. Diablo Canyon Nuclear Generation Station produces electricity for less than 5 cents/kWh, and 3.7 cents of that are capital amortization. Fully-amortized nuclear power stations in Illinois, Pennsylvania, etc. produce electricity for less than two cents/kWh.

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