November 5, 2013
Opinions, U.S.

Pull the plug on a renewable electricity standard

By Phil Hall | Congress Blog | The Hill | November 04, 2013 | thehill.com

A pair of Democratic senators that happen to be first cousins – Colorado’s Mark Udall and New Mexico’s Tom Udall – have introduced a bill that seeks to establish a national renewable electricity standard. While Congress has no shortage of sketchy proposals, this bizarre endeavor needs special attention – if only to be exposed as using the cover of so-called clean energy to waste money on unsustainable goals while offering significant kickbacks to the senators’ constituents.

Under the Udalls’ proposal, the new national renewable electricity standard would require that U.S. utilities generate 6 percent of their electric power via renewable energy sources in 2014 and work their way up to 25 percent by 2025. It is a rather grand proposal, but it conveniently ignores the basic economics of today’s power generation environment.

According to 2012 data released by the U.S. Energy Information Administration (EIA), roughly 68% of the four billion kilowatt-hours of electricity generated in this country comes from fossil fuels, while 37 percent comes from coal and 19% comes from nuclear energy. Hydroelectric power, which neither the EIA nor the Udalls classify as a renewable energy source, makes up 7 percent of the nation’s total electric power generation.

Renewable energy, as of 2012, is barely making much of an impact in terms of power generation. The EIA credits the combined output of this sector with 5 percent of the total electrical power supply: wind energy serves up 3.46 percent, followed by biomass at 1.42 percent, geothermal at 0.41 percent and solar at a scant 0.11 percent.

How will the Udalls’ proposal finance this sizeable boost of 20 percent more renewable energy power in 12 years? The proposal is intentionally vague in terms of who gets stuck with the bill, but an educated guess would point at the same funding source that created most of the current 5 percent of renewable energy power: the American taxpayers.

But this is hardly a case of money being well spent. In 2010 alone, $1 billion was poured into the solar power industry, according to the EIA. And of the puny 0.11 percent of solar-generated power, half of that output is concentrated in California.

For too many years, federal funds have been thrown at financing renewable energy solutions, but too often these solutions seem to only create problems. Even if one looks beyond the embarrassments that pockmarked the sector, most notably the Solyndra scandal, it is impossible to find any evidence that the billions of dollars invested in so-called green energy has produced a solid return on investment.

The Udalls obviously prefer not to focus on this inconvenient fact, and their announcement of the proposed standard is full of the puffery that has turned up for years in the advocacy of renewable energy.

For starters, the senators claim these standards will “create an additional 274,000-297,000 jobs,” with over half of these new jobs based in the manufacturing sector. Of course, Barack Obama also promised to plant the seeds for thousands of green energy jobs during his 2008 campaign – a great promise, to be certain, but one that never delivered.

As for manufacturing, American-based solar and wind energy companies have actually experienced declines in their domestic workforce in recent years, thus weakening the clean tech sector further. Outside of a magic wand and a “Bippity Boppity Boo” chant, it is hard to see how this can be turned around via the Udalls’ bill.

The senators also claim that the standard will “save consumers almost $100 billion on their utility bills by 2030.” But there is no evidence that electricity based on renewable energy lowers utility bills. In fact, the trend has been quite the opposite, and not just in the U.S. Germany, which has aggressively pursued solar and wind power production, has seen household utility bills quintuple over the past four years.

But the real beneficiaries in the Udalls’ proposal appears to be their constituents in Colorado and New Mexico, where vast stretches of open land can be used to house new utility-scale power plants. The senators propose that Washington “provide $13.5 billion to farmers, ranchers and other landowners in the form of lease payments.”

The proposal adds that this will result in “new economic activity in rural communities across the United States,” although just how this wealth will be shared outside of the immediate families of the farmers, ranchers and landowners receiving these new billions is not stated. Nor is it explained why the federal government is paying for this – shouldn’t the utilities building these projects foot the costs?

Whereas the celebrated Don Quixote mistook windmills for dragons, the Udalls are mistaking wind turbines and solar panels as the answer to job creation and energy self-sufficiency. The facts, of course, dictate otherwise, and the senators’ badly conceived proposal does not deserve to be plugged in.

Hall is a former senior editor of Solar Industry Magazine and publisher/editor of Business-Superstar.com