Round three on renewable energy

A RECENT OPINION PIECE in Commonwealth (“The Upside of Renewables” by Peter Rothstein and Michael Behrmann) attempts to rebut an earlier piece by me which pointed out the high cost and lack of reliability of renewable energy. However, any objective analysis of their data undercuts their arguments that renewables are economically productive.

First, in response to the fact that countries which have incorporated high levels of renewables face the most expensive electricity prices in the world, they cite Denmark’s robust economy as proof that expensive intermittent renewable resources are not impairing growth. Yet consider their data. They note that Denmark’s economy doubled over a 30-year time span as evidence that renewables don’t have a negative impact on growth. But that is actually a terrible level of economic development. The United States economy has tripled over the last 25 years. Germany, another country that aggressively pursued expensive renewables in the last 10 years, has also seen much slower economic growth than countries that have not done so. The authors clearly don’t want readers to have any context for their data. Of course, a more robust analysis is warranted, but based on the data they use themselves, one would have to acknowledge that those countries that rely heavily on renewables see slower economic growth than those that do not.

Second, the authors report that the solar industry employs more people than coal, gas, and oil combined. That may be true, but think about what that means. Coal, gas, and oil make up over 85 percent of the total energy consumed in the United States. Solar makes up a fraction of a fraction of 1 percent. So the small number of workers in fossil fuels keep 85 percent of the country running, while a huge number of solar workers do almost nothing for our productivity and economic growth. Energy is an input in a diversified economy, and the fewer workers who provide it, the more efficient that input is. We can employ huge numbers of people if we ban excavators and require the use of manual labor with shovels, but everyone recognizes that is economic folly. Unfortunately, that is the argument the authors put forward. They want us to keep employing huge numbers of workers in solar energy that provide very little value, while sacrificing the jobs which make our country a global energy powerhouse and attract manufacturing jobs back to the United States from overseas.

Third, while they find it egregious that traditional fuels have received $20 billion in support from the federal government over a six-year period, they fail to mention the form of those “subsidies.” Almost all of them are part of traditional tax treatment (i.e. depreciation deductions) available to all industries, or in the form of support for low-income families through the low-income heating energy assistance program. They also fail to mention that since FY2010 renewables have received about $15 billion every year in subsidies from the federal government.  That is $15 billion in one year and doesn’t count the many billions renewables receive from states in the form of subsidies, mandates, tariffs, grants, loan guarantees, and property tax abatements. Renewables are the subsidy pig at the trough.

Energy Information Agency data shows the inefficiency of renewables. In 2010, the Energy Information Administration reported that energy subsidies for coal, natural gas, and oil equal $0.0006 per kilowatt hour for electricity that they produce. Wind energy subsidies are 87 times higher on a per-kilowatt-hour basis. Solar electricity is subsidized over 1,600 times more than fossil fuels! The Energy Information Administration did not update the data in their 2013 report on subsidies, but it’s obvious that massive federal and state subsidies are required to keep building wind and solar power. Renewable energy is not efficient development. It is not economically rational development. It certainly is development that raises the cost of electricity while squeezing out traditional generation. This type of foolish policy has dangerous implications for the growth of our economy and the reliability of our electrical grid.

All you need to know is that whenever just one of these lifelines is threatened within any state government, the renewable industry threatens to leave the state. They know that without all this support they cannot survive. If that is the case, are they really affordable and economically sustainable? We all know the answer is no.

If we want our economy to grow, if we want to raise our productivity and ensure the next generation has better lives than ours, then we need to use the most economical forms of energy possible. That is what allows businesses to improve, allows manufacturers to expand, and attracts new companies to our country and region. Continuing to throw massive amounts of money at renewables may employ lots of people, but it is not smart policy. And their own data show it.

Michael Sununu is the owner of Sununu Enterprises LLC, a consulting firm focused on water, telecommunications, and energy infrastructure located in New Hampshire.