Diana Furchtgott-Roth, from Real Clear Markets, has written the following article stressing how Italy has substantial problems in their economy. The EU forces Italy to buy subsidized alternative energy at almost five time the cost of other sources, increasing the Italian deficit and on top of that their politicians have the highest salaries in Europe.
Italian electricity companies have to buy all wind power generated at $392 per megawatt hour. They must buy solar power at $520 per megawatt hour. In comparison, electricity generated by natural gas costs $95 per megawatt hour. How ironic that the European Central Bank is trying to get Italy to reduce its deficit, yet the EU insists that Italy buy alternative electricity at four or five times the cost of natural gas. Austerity obviously doesn’t apply to electricity production.
Italy’s politicians have the highest salaries in Europe, $250,000 a year, plus $20,000 annually in travel expenses. When they retire, their pensions range from $47,000 to $200,000 a year.
Michael Chamberlain from Watchdogwire.com reported how the Silver State’s Renewable Portfolio Standard (RPS) will cost Nevadans $2.275 billion over the next twelve years, according to this study, done by the Beacon Hill Institute.
The authors claim the RPS will result in a loss of approximately 1,930 jobs and a reduction of more than $230 million in Nevadans’ disposable income during that time. In addition, the study states that the RPS isn’t likely to reduce Greenhouse Gas emissions (GHGs) nearly as much as advertised.
The study found: The current RPS law will raise the cost of electricity by $174 million for the state’s electricity consumers in 2025, within a range of $45 million and $310 million Nevada’s electricity prices will rise by 6 percent by 2025, due to the current RPS law, within a range of 1.6 percent and 10.8 percent.
Angela Greiling Keane at Bloomberg writes an article about the numbers behind an automaker that the government has given millions of taxpayer dollars:
Fisker Automotive Inc. spent more than six times as much U.S. taxpayer and investor money to produce each luxury plug-in car it sold than the company received from customers, according to a research report.
The Anaheim, California-based company made about 2,500 of its $103,000 Karmas before halting production last year, disrupting its plans to use a $529 million U.S. loan to restart a shuttered Delaware factory owned by the predecessor of General Motors Co. (GM) The Karma was assembled in Finland.
Mark Modica at the NLPC blog writes about the government’s investment in new technologies that may end up being a huge waste of money:
The worst part of this mostly-untold story is the taxpayer money that continues to be wasted on the green pipe dream. The American people were lied to about the potential for the Chevy Volt, as well as for the technology behind it. Billions of dollars were spent on grants and failed loans for production of plug-in EVs, lithium-ion batteries and charging stations. Wealthy purchasers of $40,000 Chevy Volts and $100,000 Teslas receive federal tax credits for $7,500 each. Subsidized battery makers like A123 Systems are bankrupt and government-supported, green automaker Fisker is not far from it. How are middle-class or poor Americans benefiting from any of this?
A WSJ column by Kimberley A. Strassel delves into the cronyism involved in the government loan process for automakers, showing an example of a company that was almost given loans despite clear signs they were not qualified:
For an excellent study in how green-energy cronyism works, look instead to the near miss (for taxpayers) of Next AutoWorks. That startup applied for a $320 million federal loan guarantee in 2009, promising a Louisiana factory that would produce cheap and fuel-efficient cars. Next didn’t, ultimately, get its loans.
It wasn’t from a lack of political lobbying. Emails referenced in a House Oversight subcommittee hearing this week confirm every suspicion about the degree to which powerful moneymen worked the system on behalf of their investments, pushing their political contacts to roll over Energy’s credit department.
Bill Wilson writes at Fitsnews about the EPA’s cronyism, and how it has threatened public safety:
According to OpenSecrets.org, Honeywell lobbied Congress on the issue of hydrofluorocarbons from 2009-2011 — right up until the EPA’s approval of HFO-1234yf. While it’s not clear what they were pushing for, a ban on these substances would have dramatically increased demand for the new refrigerant.
Whether this is a case of crony capitalism or the “green agenda” run amok remains to be seen, but one thing is clear: Gina McCarthy approved the promotion of a dangerous product that threatens American lives and jobs.
Patrick Jenevein, CEO of Tang Energy Group wrote an opinion column in the Wall Street Journal concerning wind subsidies. Mr. Jenevein is in the green-energy business but he advocates for Washington to stop sending stimulus money to the green energy companies. He argues that easy accessible ‘stimulus funds’ make energy producers focus less on efficiency and cost reduction; they provide low efficiency and bad quality products which is the opposite of what Washington intends.
Since 2009, as part of the president’s stimulus, wind-farm developers have been able to get a federal cash grant or tax credit covering up to 30% of their capital investment in a new project. This is especially attractive compared with another tax credit that rewards wind farms based on how much power they actually produce. Through May 2012, according to the National Renewable Energy Laboratory, Washington spent some $8.4 billion on these cash grants.
Government subsidies to new wind farms have only made the industry less focused on reducing costs. In turn, the industry produces a product that isn’t as efficient or cheap as it might be if we focused less on working the political system and more on research and development. After the 2009 subsidy became available, wind farms were increasingly built in less-windy locations, according to the Department of Energy’s “2011 Wind Technologies Market Report.”
Rich Tucker at Heritage’s Foundry blog writes about the possible cronyism related to the opening of an electric vehicle company in Mississippi, and why these kinds of incentives are harmful.
For example, instead of handing out direct financial incentives, Mississippi could attract jobs by improving its legal and economic climate. Companies prefer to set up shop in states where they are confident they won’t be subjected to frivolous lawsuits. Yet the American Legislative Exchange Council’s survey Rich States, Poor States ranks the state’s liability system 48th out of 50. Improving its tort litigation system (as Texas has done) would encourage more businesses to set up shop in the Magnolia State.
When the federal government or the state governments act as venture capitalists, taxpayers lose. It’s a form of federalism—but the wrong kind.
Alan Ohnsman & Angela Greiling Keane from Bloomberg have recently reported about the uncertain future of the ‘stimulus’ funded company Fisker. This is just another example of how governments are inefficient at allocating resources and supporting businesses, and how under the disguise of green energy rhetoric they extend cronyism and corporate welfare.
Fisker Automotive Inc.’s mass firings after receiving federal loans to build luxury plug-in cars is adding to the political debate over the U.S. government’s funding of clean-energy programs. Most of the assets of Fisker’s battery supplier that received a $249.1 million federal grant, the former A123 Systems Inc. (AONEQ), were acquired last year by a Chinese company. Now Fisker, awarded $529 million in U.S. loans, is firing 75 percent of its workforce after failing to secure a deal with an automotive partner to fund operations.
“The Department of Energy has never owned up to its mistakes and acknowledged it didn’t do a good job of choosing Fisker and A123 as worthy of taxpayer investment,” Senator Chuck Grassley, an Iowa Republican, said in an e-mailed statement. Another Republican, Senator John Thune of South Dakota, predicted “the company could go bankrupt and cost millions of taxpayer dollars.”
David Tuerck, Ryan Murphy and Paul Bachman from the John Locke Foundation, have recently written the following pre-view analysis on the latest report from RTI International and La Capra Associates on Clean Energy Development in North Carolina. Their pre-review questions several assumptions and cost-benefit analysis done by the report, suggesting that the benefits have been overstated and the social impact on government spending non-existent.
You can get access to the PDF form of the report here
A recent report from RTI International and La Capra Associates claims to find net economic benefits for North Carolina’s renewable energy policies, but these benefits are mismeasured and spurious. Orthodox cost-benefit analysis will not find anything like what the report’s authors estimate. Many claims are difficult to directly evaluate given the opacity of the report, despite the report’s length. Elsewhere, confusing terminology conceals the lack of any evidence that subsidizing green energy will reduce the cost of power in North Carolina.
Hidden in the text, tables, and charts is that there is little to be said for the renewable energy subsidies themselves. The cost savings will be the result of “energy efficiency,” not renewable energy. Everything else is trivial. But by giving the impression that “not using energy” counts towards “renewable energy,” they claim renewable energy is cheaper.