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‘Green Bullets’ vs. Renewable Energy: WHY isn’t there a level subsidy playing field?

by John Brian Shannon | July 29, 2017

All I’m asking for is that renewable energy gets the same subsidies as fossil fuels or nuclear energy. Is that so unreasonable?

You can determine the subsidy costing by any method you choose using a per unit of energy formula — per Barrel of Oil equivalent (BOe) or per kW/h, or any other unit of energy formula you want — but conventional energy gets four-to-six times the subsidies as renewable energy, depending upon which method you use for your calculations.

America’s energy security is better served by LETTING THE MARKET CHOOSE what’s best for the continent and that can only happen when all energy producers play on the same subsidy playing field.

Renewable Energy adds to national security, while Conventional Energy leaves North America vulnerable

North America’s biggest national security vulnerability (aside from bio-warfare) comes from the hundreds of thousands of miles of electrical transmission corridors (pylons and power lines) and pipelines that crisscross the continent.

Every Pentagon General, along with every military rank down to Corporal knows it would be boringly easy for even the most inept enemy of the United States and Canada (both national grids are interconnected) to destroy the North American grid with as little as three well-placed air-to-ground missiles, or alternatively, three truck bombs. Those interconnect sites are unbelievably unprotected.

If that were to happen in mid-winter, hundreds of thousands of North Americans would die, and that’s indisputable.

That it hasn’t happened, proves to me that North America doesn’t have any ‘real’ enemies or it would have occurred a long time ago. (Yes, the U.S. and Canada are ‘irritated’ at some countries and some countries are ‘irritated’ at us. But by virtue of the fact that *they haven’t hit us where we’re most vulnerable* proves they aren’t real enemies, they’re only ‘irritants’)

Centralized Power vs. Decentralized Power

Conventional grid adherents are living in a previous century — a centralized grid WAS the best thing for North America in the 20th-century — but those days are long gone!

Fossil fuel supporters should stop helping our enemies, which they do by supporting a conventional national grid that even the U.S. military 3X over couldn’t protect!

Decentralized power is the ONLY choice for an energy-secure America!

Make better investment returns on Renewable Energy by leveling the subsidy playing field

I understand that many people are heavily invested in fossil fuels and nuclear power — and I don’t blame them, they were safe and secure investments for decades but such industries run counter to the national interest in the 21st-century — good investment returns aside.

And yes, the ONLY reason you have those high returns is that those industries are heavily-subsidized by U.S. and Canadian taxpayers; Oil & Gas get $80 billion per year in the U.S. and about $10 billion annually in Canada, nuclear a bit less — but nobody really knows for sure, not even the governments — because it’s all mashed together with nuclear fuel production, long-term ‘spent fuel’ storage, nuclear warhead production and nuclear warhead disposal.

Citizens can’t see this because those white elephants are obscured by mountains of cash!

Efficient investment vs. Inefficient investment

Energy companies have become like the Big 3 during the 1960’s and 1970’s, big, powerful, lazy, and wholly unwilling to adapt to changing market conditions.

Remember way back in 1970 when 95% of cars registered in the U.S.A. were domestic built and sold? Well, due to the laziness of the Big 3, in 2017 less than 35% of new car registrations are North American makes, and more than half of the parts of North American manufactured vehicles are supplied by Asia or Mexico!

You call that progress???

It’s killing North America!

A high 35% corporate tax rate in the United States might have had something to do with how that came to pass.

Renewable Energy creates more jobs than Conventional Energy (even using fossil fuel industry stats!)

Millions of people are unemployed in North America because the 1% wanted higher investment returns on their energy stocks so North American corporations off-shored millions of jobs! UN-AMERICAN in the extreme! (You already ‘work’ for China’s interests by sending North American jobs there, why don’t you just move there?)

Fossil fuel companies and their investors MUST become patriotic by relearning how to be ‘fleet of foot’ and adapting to the changing national security paradigm — and become ‘ENERGY COMPANIES’ instead of (only) Oil & Gas or (only) nuclear or (only) coal companies.

Profit is a great thing! Energy companies should make plenty of profit because energy is an ultra-important factor in the 21st-century. However, uneven energy subsidies are not a great thing.

Putting a square peg in a square hole, not a square peg in a round hole

When we train soldiers, we don’t try to put a square peg in a round hole — we choose those people based on their merit.

(The best snipers become snipers — not truck drivers. The best tank captains become tank captains — not dishwashers. And the best fighter pilots don’t peel potatoes aboard our warships!) Rather obvious when you think about it, isn’t it?

By the same token, if electricity companies were to embrace ALL energy (they don’t do it now because some energy is highly subsidized and some isn’t) they could then have the option to put a round peg in a round hole and a square peg in a square hole. As it should be!

I must add that gas-fired power generation is increasingly important towards meeting demand — and even moreso as increased renewable energy capacity comes on stream. Natural gas burns up to one million times cleaner than brown coal (lignite) and up to ten-thousand times cleaner than the best black coal (anthracite) and gas power plants can be as local to demand centres as required — quite unlike hydro-power dams and coal-fired power plants, and even nuclear power plants which also aren’t welcome near city centres.

Again, by setting an even subsidy playing field THE MARKET will choose which kind of power to best use in what location — and don’t worry — your precious investment returns will be just as high as they are now. Maybe higher!

As for U.S. jobs, solar produces more jobs than fossil fuel and nuclear power producers put together — and rising exponentially.

Renewable energy vs. 'green bullets'
More workers in solar than in all fossil fuel power generation combined (U.S.A.) — Statista

Summary

By setting a level subsidy playing field, the cream of the crop among energy producers will rise to the top, and market forces will choose which peg to put in which demand hole — nothing could be more efficient!

And in that case, renewable energy will win hands down — with natural gas-fired generation rising to meet demand to cover the variability of onshore wind power output (but not offshore wind power, because there the wind blows relentlessly) and solar power output after the Sun sets.

National security will become greatly enhanced as North America will no longer be dangling from a thread via the hundreds of thousands of miles of pylons and power lines that will no longer be required, as renewable energy is local energy, while conventional energy must carry electricity many thousands of miles. (And natural gas-fired generation can be local energy too, when the power plant is sized according to local demand)

Stop choosing profit over North American national security!

Stop arguing against North American national security, stop arguing against a free market, and stop arguing that you can’t make the same or better profits via renewable energy — assuming the same per unit of energy subsidies as conventional energy receives. It’s intellectually dishonest.

And for those who want to send me ‘green bullets’ (we all know what that code-phrase means) be man enough to bring it to my face, mano a mano.

I’m in Vancouver.


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Creating Jobs via Renewable Energy Adoption

by John Brian Shannon | February 8, 2015

The Green Economy – It’s always a good thing to add new jobs to the economy!

In good times or bad, adding more jobs to the economy always equates to higher GDP, lower debt-to-GDP levels, lower unemployment insurance expenditures and higher revenues for governments from income tax and sales tax.

There are no examples where adding net jobs to an economy has resulted in a net loss to the economy

It’s positive for individuals too. Higher employment levels generally lead to higher incomes, small and large businesses notice increased revenue and there is always the chance that companies may begin to expand their facilities and hire more staff to handle increased sales.

Which is why the case to add more renewable energy is so compelling

IRENA Renewable Energy jobs infographic - Global
Global jobs created by the Renewable Energy industry. Image courtesy of IRENA.

Over decades of time, mature energy industries have increased output with fewer employees (jobs)

In the Top 10 on the mature industry list, must certainly be hydro-electric power plants, followed by nuclear power plants and gas-fired power plants. There we have astronomical installation costs and employment numbers — but once construction of the power plant is completed only very low staffing levels remain to operate the power plant.

Which is very unlike the case with renewable energy

Why? Because once a multi-billion dollar hydro-electric dam is built, it’s built. You don’t need to build thousands of them per day.

It’s the same with multi-billion dollar nuclear power plants — all you need after the construction phase ends are a small number of highly trained people to monitor the various systems. And some security people. That’s it.

With solar panels, a factory must produce 1000 per day (or more, in the case of larger factories) every weekday. Suitable markets must be found, factories must be built/leased, production floors must be built, materials sourced, and the panels themselves must be designed and engineered, assembled, packed, shipped and accounted for. Accountants do what they must do, marketing people manage a steady train of media events, trade shows and advertising programs, and on and on it goes — and all of it is a part of the solar industry. That activity creates work for thousands of people, every workday of the year. (And that short description doesn’t begin to cover it)

Then there are the solar panel installers, the sales teams/estimators, and the companies that build the inverter systems, which is a whole other value chain.

The wind power industry can also make high employment/lower power plant cost claims — although wind turbines average about $1 million dollars each — as opposed to solar panels which mostly range from $10 each to $400 each, depending on their size and composition.

Renewable energy is hugely labour-intensive and many thousands of permanent jobs are created — quite the opposite of conventional power generation

It is worth commenting that 2014 renewable energy employment numbers (once they become available) will show a significant improvement over 2013 numbers.

The entire industry is surging forward unequally, but renewable energy growth in some nations is trending upwards like the Millennium Falcon trends upwards.

Below is a breakdown graphic showing the labour intensity of the various types of renewable energy.

Globally, 6.5 million jobs were created in 2013 from renewable energy.
Globally, 6.5 million jobs were created in 2013 from renewable energy. Image courtesy of IRENA.

We can also look at a breakdown graphic of jobs per MW of electricity produced where we see that coal, nuclear, and oil & gas require very few humans per MW

Potential jobs by MegaWatt (MW) by energy type. Image courtesy of IRENA.
Potential jobs by MegaWatt (MW) by energy type. Image courtesy of IRENA.

There’s no doubt that global energy demand is growing, not only in the developed world, but in the developing world as well.

Each kind of energy (non-renewable and renewable energy) has it’s own pros and cons.

One of them, is that non-renewable energy requires far fewer humans over the lifetime of the power plant.

Renewable energy on the other hand, is a rapidly-growing manufacturing, installation, and marketing industry that requires evermore blue collar and white collar employees.

And now that solar power, wind power, and biomass power have reached — or are within months of matching (per kWh) price parity with non-renewable power plants — the question becomes;

Do we want to employ 1.3 persons full-time per MW, or do we want to employ up to 24 people full-time per MW?

For comparison purposes, the typical coal, gas, or nuclear power plant can supply 1000 MW (or 1 GigaWatt) of electrical generation capacity, while the average wind turbine can supply 1 MW each.

The average 1 MW wind turbine costs about $1 million apiece, so to get 1 GW of electrical generation capacity, you need to install 1000 of them (1000 x $1 million each = $1 billion total) and the installation and connection to the grid of that many turbines might take up to 24 months.

Each 1 GW installation of coal, gas, or nuclear power, costs well over $1 billion and can take up to 15 years to construction completion.

For example, the 2.4 GW nuclear power plant under construction in Vogtle, Georgia was originally planned to cost $14 billion, but due to construction and regulatory delays (and now lawsuits between the principals involved) it may cost significantly more than that and the completion date has been extended by months, or even years.

At this point, the total cost may exceed $17 billion and it may take an extra year to complete — for a total of 2.4 GW of installed capacity over 11 years of construction and delays, at a total cost of $7.08 billion per GigaWatt. It won’t get any better than that, but it may get much worse.

The 10-year construction plan is already behind schedule by 14-months, and now faces an additional (up to) 18-month delay.

PennEnergy: Southern Co. might spend [another] $8B on nuclear plant
ABC News: Builder Projects 18-Month Delay for Nuclear Plant in Georgia

One point about Plant Vogtle (the official name of the plant) is that the two 1200 MW (1.2 GW) reactors are of the latest GE/Toshiba AP-1000 design, noted for their passive safety systems and additional safety redundancies built into the power plant. If you’re going to build a nuclear power plant it might as well be the safest one.

As new capacity is added to global electrical grids, more of it is renewable energy

More utility companies are adding new renewable energy capacity as opposed to adding new non-renewable energy capacity due to faster installation time frames, fewer regulatory delays, the lack of fuel supply concerns going forward, and total installation cost per GigaWatt.

In 2013, of the 207 GW added to the world’s electrical grids — renewable energy accounted for 120 GW of new installations, while 87 GW accounted for non-renewable energy.

Once the 2014 numbers are released to the public, the renewable energy statistic will have improved over 2013’s numbers. And 2016 should easily surpass the 70/30 metric.

It’s easy to visualize this in the chart below.

Global generation capacity additions to 2013 - renewables vs. non-renewables. Image courtesy of IRENA.
Global generation capacity additions – renewables vs. non-renewables. Image courtesy of IRENA.

As renewable energy displaces non-renewable energy additions to the grid — remember that renewable energy gets only 1/4 of the subsidies that fossil fuel energy gets!

See: Energy Subsidies: The Case for a Level Playing Field

Imagine if renewable energy got the same subsidies as non-renewable energy!

In practical terms, it would mean that 100% of all new power generation would be renewable energy.

Also, the renewable energy manufacturing sector would need to accelerate production to meet demand — meaning many hundreds of thousands of permanent jobs would be created immediately after the levelized subsidy was announced.

Between 2017-2019 — and even with the higher subsidies enjoyed by coal, nuclear, and oil & gas — it will cost less to install new renewable energy power plants than to install new non-renewable energy power plants.

Germany is one of the countries leading the transition to renewable energy

Due to German public pressure in the aftermath of the Fukushima-Daiichi incident in March 2011, Germany shut down nearly half of their nuclear power plants and were forced to accelerate their transition timeline to renewable energy.

This unexpected development created additional costs for Germany, but regardless, their Energiewende program is still a stunning renewable energy success story.

Although progress has slowed from the frenetic pace of 2011-2013, Germany is very much a world leader in the transition to renewable energy.

Renewable energies were the number 1 source of power production for the first time ever. [In Germany]

Renewables gained slightly in 2014 and now comprise 27.3 percent of domestic power consumption.

They have now permanently displaced lignite [brown coal] as the top source of power in the electricity mix. — The Energiewende in the Power Sector : State of Affairs 2014 (downloadable PDF)

Here is a nice chart courtesy of our friends at the Fraunhofer Institute in Germany.

How goes the Energiewende, Germany? Es geht gut! Image courtesy of the Fraunhofer Institute.
How goes the Energiewende, Germany? Es geht gut! Image courtesy of the Fraunhofer Institute.

There is no doubt that the world will transition to renewable energy, and even major oil companies like Shell and BP are in agreement that by the year 2100, almost 95% of all energy demand will be met by renewable energy.

In one scenario, Shell says that by 2060 the largest energy provider will be solar power.

How quickly that energy transition will occur, is what the present conversation is all about

Increasingly, the conversation centres around matching renewable energy subsidies with the (4x higher) subsidies enjoyed by coal, nuclear, and oil & gas power generation.

So get ready to breathe fresh air, because change is coming!


Related Articles:

Thank you to our friends at IRENA and at Fraunhofer Institute for their valuable graphics.

Energy Darwinism: The Case for a Level Playing Field

by John Brian Shannon

Energy Darwinism = Leveling the Subsidy Playing Field

By now, we’re all aware of the threat to life on this planet posed by our massive use of fossil fuels and how we might attempt to reduce the rate of CO2 increase in our atmosphere.

Energy Darwinism can solve all our energy-related infrastructure and national security problems while increasing GDP, by lowering the cost of energy to corporations, consumers and governments.

Energy Darwinism - Global Energy Subsidies (2014, in billions USD)Both divestment in fossil fuels and reducing fossil fuel subsidies attempt to lower our total CO2 emissions by reducing fossil fuel industry revenues; While a carbon tax attempts to lower our total CO2 emissions via increased costs to energy producers and consumers.

But a revenue-neutral solution (from the oil industry perspective) would work to lower CO2 emissions by ramping-up renewable energy subsidies on a per-unit-of-energy basis to match existing fossil fuel subsidies.

So far, there are no fossil fuel lobby groups dedicated to preventing renewable energy from receiving the same per unit of energy subsidies as the fossil fuel industry receives, and has been receiving since 1918 in the United States.

Imagine how hypocritical the industry would look if it attempted to block renewable energy subsidies that were exactly matched to fossil fuel subsidies.

Were governments to decide that renewable energy would receive the same annual subsidies as the fossil fuel industry, a number of things would begin to happen;

  • Cleaner air in cities
  • Lower CO2 emissions
  • Less imported foreign oil
  • Lower unemployment rates
  • Dirtiest fossil projects canceled
  • Sharp decline in healthcare costs
  • Democratization of energy through all economic quintiles

Summary

Even forgetting for a moment the externality costs of fossil fuels (up to $2 trillion per year) the annual $548 billion in subsidies for fossil fuels promotes an unfair marketplace advantage.

But instead of punishing the fossil fuel industry for supplying us with reliable energy for decades (by taking away ‘their’ subsidies) or by placing the burden of a huge carbon tax (one that reflects actual fossil fuel externality costs) I suggest that we match the renewable energy subsidy to the fossil subsidy on a per-unit-of-energy basis… and let both compete on a level playing field in the international marketplace.

Assuming a level playing field; May the best competitor win!

By matching renewable energy subsidies to fossil fuel subsidies, ‘Energy Darwinism’ will reward the better energy solution

My opinion is that renewable energy will win hands down and that we will exceed our clean air goals over time — stopping global warming in its tracks.

Not only that, but we will create hundreds of thousands of clean energy jobs in the process and accrue many other benefits during the transition to renewable energy, as per the German experience. We will also lower healthcare spending, agricultural damage, and lower damage to steel and concrete infrastructure from acid rain caused by burning fossil fuels.

In the best-case future: Oil & Gas companies will simply become known as Energy companies

Energy Darwinism will reward investors who migrate from fossil fuel to renewable energy within the same energy company.

At the advent of scheduled airline transportation nearly a century ago, smart railway companies bought existing airlines or created their own airlines and kept their traditional investors and gained new ones.

Likewise, smart oil and gas companies should now buy or create renewable energy companies and keep their traditional investors and gain new ones.

That thinking represents the best energy future for energy producers and energy consumers.


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