Bloomberg’s New Energy Finance forecast is predicting that global clean energy investments may double to $395 billion by 2020, led by growth in offshore wind and solar power.[i] But, the Dutch find that offshore wind is too expensive to subsidize by the government and the Duke of Edinburgh finds that wind farms are useless, even though the British government plans to build more. And, American opinion polls are showing less interest in government funding for green energy (wind, solar, and hydrogen) here in the United States, slipping to its lowest point since 2006, according to the Washington Post.[ii] This slip in the polls is a decline of more than 10 percentage points, and demonstrates the public effect of Solyndra’s bankruptcy and the resulting Congressional probe into renewable loan guarantees. Also, fewer people are seeing government action as essential to spur energy technology, dropping from 58 percent to 52 percent of those polled.[iii]
The Netherlands Experience
Offshore wind became a reality for the Dutch in 2006 when they built their first offshore wind farm to begin — they believed — reducing their carbon dioxide emissions. Five years later, however, the Dutch government finds that offshore wind at 18 Euro cents ($0.24) per kilowatt hour is just too expensive for continued government hand outs, consisting of about 4.5 billion Euros ($6 billion) last year. Instead, the government plans to have households and industrial consumers cover the bill starting in January 2013 and to attract funds from the private sector. The change is expected to garner only one-third of the previously funded amount by the government— just 1.5 Euros—and investment dollars are expected to go to less expensive technologies. So, the future outlook for wind in Holland is bleak to say the least.[iv]
Wind currently supplies 4 percent of Holland’s power and was expected to supply 14 percent by 2020. But current speculation is that it will only supply 8 to 12 percent by then due to the changed government policy.
The Dutch are facing issues with wind power because of the high cost and maintenance of offshore wind turbines and because of onshore turbines marring the landscape and views of residents. Offshore wind is about twice as expensive as onshore wind due to the higher cost of materials, more expensive drilling methods, and more complex maintenance. Offshore wind turbines need to be able to withstand strong winds and salt water and they require special equipment and transportation for their maintenance. Because drilling the seabed requires specialized labor and equipment, it is more expensive. And additional transmission lines are needed to connect offshore units to the electricity grid onshore. While offshore wind power generates a higher level of electricity than onshore wind farms, its generation levels are still much less than fossil fuel and nuclear electricity technologies since it is still reliant on the wind blowing.
Wind farms and the British Monarchy
Prince Philip, the Duke of Edinburgh, thinks windmills are useless. In fact, he has called them a “disgrace”, and will not allow his land to be covered with them despite the leanings of the British government. He criticized the industry’s reliance on subsidies and thinks that advocates are believing in a “fairy tale” since wind power requires back-up power.[v]
Britain has 3,421 turbines, over 85 percent of which are on shore, and another 4,500 are expected to be built. British electricity consumers pay an average of 90 pounds ($143) a year to subsidize wind farms and other forms of renewable energy in order for the country to meet its carbon-reduction targets. Foreign companies, which own two-thirds of the country’s wind turbines, are estimated to receive 500 million pounds a year in subsidies. While Prince Philip is against wind, the Crown owns almost all of the offshore areas on the country’s 7,700-mile coastline. Britain currently has 436 offshore turbines. With more offshore sites having been approved, Britain’s offshore turbines could reach 7,000 within 10 years. Growth in offshore wind farms could be worth 250 million pounds a year.
Clean Energy investment
Bloomberg’s New Energy Finance forecast sees clean energy investment rising from $195 billion in 2010 to $395 billion in 2020, and $460 billion in 2035. This investment, they believe, would increase world “clean energy” capacity by just 3 percentage points. They predict that China will take the lead over Europe in 2014 with outlays on clean energy of almost $50 billion annually. Investment growth will be the largest in India, the Middle East, and Africa, ranging from 10 to 18 percent. But the Bloomberg forecasters believe that by 2020, markets outside of the European Union, the United States, Canada and China will account for 50 percent of global annual investment in renewable energy capacity. Of course, that will only be if the world still believes there is a merit in renewable energy and the subsidies it needs to survive.
Despite the Bloomberg forecast, polls in the United States are seeing some disenchantment with renewable energy due to recent events with bankruptcies of renewable energy firms such as Solyndra. The polls show a decrease in support for federal spending on renewable energy of over 10 percentage points and a drop of 6 percentage points in whether government support is necessary to spur new energy technologies. And further, the renewable loan program did not create the jobs President Obama had touted. The Washington Post reported that the $38.6 billion green loan program had created only 3,545 jobs over two years when President Obama had predicted it would “save or create” 65,000.[vi]
History has shown that the government is a poor selector of new technologies. The Washington Post provided a list of failed government energy projects that included the Clinch River Breeder Reactor, the Synthetics Fuel Corporation, the hydrogen car, and “clean coal” to remove carbon dioxide emissions from burning coal and sequestering them. Despite government funding and backing, none of these projects was successful. And not only have solar firms (Evergreen Solar, Solyndra, SeptraWatt) supported by the U.S. Department of Energy filed for bankruptcy this year, but Beacon Power, a firm that the department supported that tried using flywheels for electricity storage, filed for bankruptcy on October 30. Ener1, a maker of lithium-ion batteries, is also a recipient of an Energy Department grant and was delisted on October 28 by Nasdaq because of its low stock price.[vii]
Government investment in failed energy technologies has cost American taxpayers billions of dollars, the latest of which have been in solar manufacturers such as Solyndra and electricity storage technology, Beacon Power. The government has a history of funding economic ventures in energy technology that have failed as future energy technologies. And yet, Nobel prize winner of physics and Secretary of Energy, Steven Chu, still believes he should spend our hard-earned dollars on more energy experiments. Perhaps that will change as more and more people learn the truth about renewable energy and become disenchanted as we have seen with the Dutch government and the Duke of Edinburgh.
[i] Bloomberg, Clean Energy Investment May Double to $395 Billion by 2020, November 16, 2020, http://www.bloomberg.com/news/2011-11-16/clean-energy-investment-may-double-to-395-billion-by-2020.html#
[ii] Washington Post, Support for federal backing for renewables slips, November 10, 2011, http://www.washingtonpost.com/national/health-science/support-for-federal-backing-of-renewables-slips-driven-by-gop-skepticism/2011/11/10/gIQA97kX9M_story.html?sub=AR
[iv] Reuters, Dutch fall out of love with windmills, November 16, 2011, http://www.reuters.com/article/2011/11/16/us-dutch-wind-idUSTRE7AF1JM20111116
[v] The Telegraph, Wind farms are useless, says Prince Philip, November 19, 2011, http://www.telegraph.co.uk/news/uknews/prince-philip/8901985/Wind-farms-are-useless-says-Prince-Philip.html
[vi] Washington Post, Obama green tech program that backed Solyndra struggles to create jobs, September 14, 2011, http://www.washingtonpost.com/politics/obama-green-tech-program-that-backed-solyndra-struggles-to-create-jobs/2011/09/07/gIQA9Zs3SK_story.html
[vii] Washington Post, Before Solyndra, a long history of failed government energy projects, November 11, 2011, http://www.washingtonpost.com/opinions/before-solyndra-a-long-history-of-failed-government-energy-projects/2011/10/25/gIQA1xG0CN_story.html