Alternative Energy Not Ready For Prime Time
SEARCH BLOG: ENERGY
You've probably heard of the reliability problems that plague alternative energy sources. Wind doesn't blow; electricity doesn't flow. Sun don't shine; electricity won't be mine.
Statistically, based on the sample, 1 in every 10 turbines has been shut down because of significant damage. This sample is collected from 2006 to 2010, so in the first 4 years of operation, 237 failure incidents. The wind industry needs to get serious about testing and the DOE needs to get serious about new technology that will make wind energy a success. [source]Regardless, the government feels compelled to push the U.S. away from fossil fuels toward alternatives. President Obama has targeted coal with the hope that dramatically reducing coal generated electricity will force a move to wind and solar power. Instead, it has forced a move to natural gas.
Congress said "enough" and refused to extend the Production Tax Credit for wind power although the wind power industry is lobbying fiercely for such credits while claiming all sorts of miracle improvements in wind power and reduction in the megawatt costs.
Solar power has been a basket case.
Here is a brief list of government-back alternative energy failures from economist Mark J. Perry:
● Raser Technologies. In 2010, the Obama administration gave Raser a $33 million taxpayer-funded grant to build a power plant in Beaver Creek, Utah. After burning through our tax dollars, the company filed for bankruptcy protection in 2012. The plant now has fewer than 10 employees, and Raser owes $1.5 million in back taxes.It's not that government is wrong to push new technologies. It's just that there doesn't seem to be a lot of business acumen in the way it is done. Apparently, all that is needed is a marketing presentation with the word "green" prominently displayed and the government literally throws money at them.
● ECOtality. The Obama administration gave ECOtality $126.2 million in taxpayer money in 2009 for, among other things, the installation of 14,000 electric car chargers in five states. Obama even hosted the company’s president, Don Karner, in the first lady’s box during the 2010 State of the Union address as an example of a stimulus success story. The company has since incurred more than $45 million in losses and has told the federal government, “We may not achieve or sustain profitability on a quarterly or annual basis in the future.” Worse, the company is now under investigation for insider trading.
● Nevada Geothermal Power (NGP). The Obama administration gave NGP a $98.5 million taxpayer loan guarantee in 2010. The New York Times reported last October that the company is in “financial turmoil” and that “[a]fter a series of technical missteps that are draining Nevada Geothermal’s cash reserves, its own auditor concluded in a filing released last week that there was ‘significant doubt about the company’s ability to continue as a going concern.’ ”
● First Solar. The Obama administration provided First Solar with more than $3 billion in loan guarantees for power plants in Arizona and California. According to a Bloomberg Businessweek report last week, the company “fell to a record low in Nasdaq Stock Market trading May 4 after reporting $401 million in restructuring costs tied to firing 30 percent of its workforce.”
● Abound Solar, Inc. The Obama administration gave Abound Solar a $400 million loan guarantee to build photovoltaic panel factories. In February the company halted production and laid off 180 employees.
● Beacon Power. The Obama administration gave Beacon — a green-energy storage company — a $43 million loan guarantee. At the time of the loan, “Standard and Poor’s had confidentially given the project a dismal outlook of ‘CCC-plus.’ ” In the fall of 2011, Beacon received a delisting notice from Nasdaq and filed for bankruptcy.
● This is just the tip of the iceberg. A company called SunPowergot a $1.2 billion loan guarantee from the Obama administration, and as of January, the company owed more than it was worth. Brightsource got a $1.6 billion loan guaranteeand posted a string of net losses totaling $177 million.
● And, of course, let’s not forget Solyndra — the solar panel manufacturer that received $535 million in taxpayer-funded loan guarantees and went bankrupt, leaving taxpayers on the hook.
There is always the argument that entrenched forces will make it impossible for new alternatives to reach the marketplace. You know, the airplane would never take the place of passenger trains. Cars would never take the place of horse-drawn carriages. Light bulbs would never take the place of gas lamps. But they all did because they were better alternatives and were developed without the government picking a winner or subsidizing them. Private individuals took the risks and proved their products were superior. With that proof came plenty of investors willing to risk their money... not the taxpayers' money.
The marketplace recognizes a better idea... and a worse one.
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