Alexandria Ocasio-Cortez wants a $90 trillion Green New Deal that includes a full shift to zero emissions within a decade. Given that she plans to dismantle the nuclear industry, this will require crazy amounts of solar and wind power almost immediately.
Sen. Elizabeth Warren likewise wants to power the United States entirely with renewable sources of electricity — again, without using any carbon-free nuclear power.
They would both do well to look to the lessons of history, specifically, to the green racket and the taxpayer ripoffs that result whenever renewable energy becomes a thing and government steps in “just” to give it a push.
Yesterday, Bloomberg News told the hilarious and sad, if you’re a taxpayer, story of a solar plant that might well stand in the Nevada desert for years, a monument to government waste. The Crescent Dunes solar plant received a $737 million “investment” from taxpayers in the form of loan guarantees. Citigroup also made a modest investment alongside them. All of that money will now be lost. The plant has been closed for eight months, and at long last the utility company that purchases power for Nevada residents has decided to stop purchasing from it due to its “lack of reliability.”
I cannot share the writer’s view that this is irony. Rather, this outcome always looms when government tries to push an industry and its technology in a given direction.
This is about as clear a lesson as one could hope to learn, clearer even than the failure of Solyndra almost a decade ago, about what happens when government tries to “jump-start” an industry with special grants, loan guarantees, and regulatory favoritism.
This technology was not ready for prime time when construction began. Harry Reid did not know this. Steven Chu did not know this. Why should they? They are politicians. They pressed taxpayers, who have no real say or specialized knowledge, into providing the seed money for aging, nonstandard technology that was doomed to obsolescence. Where private investors might have corrected course or abandoned such a project while losses were still reasonable (or at least lost only their own shirts), such precautions were not observed where other people’s money was at stake. As a result, the Department of Energy has been forced to take over a solar farm that, when it did produce power, did so at four times the cost of solar farms with cheaper, newer panels.
When a technology such as solar is truly ready to flourish and the proper infrastructure is in place to make it work, investors do not need further inducements to take justifiable risks. Nor should taxpayers be forced to provide them with inducements. After all, if you can make money effortlessly by merely pointing something at the sun, someone will figure out how to do it.
Perhaps solar’s time is already here, or perhaps it will be here in 10 years. Or perhaps other technologies will surpass it. But, in this case, it really wasn’t there, and government underscored this by wasting $1 billion trying to force the matter.
When investors take risks with their own money, they win or lose with their own money. And, if no investors will do that, then it’s a sign from the market that this is not a good idea.
In the peculiar space of electrical generation, where renewables are already heavily subsidized by the federal Renewable Portfolio Standard anyway, additional risks to the taxpayer, such as loan guarantees, are even less justifiable. Yet here we are.
This plant in Nevada will stand for years as a monument to government’s ability to choose winners and losers. The Obama administration forced taxpayers to gamble on a technology that was already on the verge of obsolescence, and they lost. Next time, let’s try to learn the lesson.
