On Energy, Trump Should Ignore Bloomberg

Some people continue to believe that we have a future filled with unicorns. Others persist in the belief that efficient renewable energy is just over the horizon.

Joe Ryan of Bloomberg advanced that belief (energy, not unicorns) recently in an article that claimed despite “all Donald Trump’s efforts to revive coal, market forces and some of his own supporters are vying to write their own version of America’s energy future.”

Alas, the evidence for his belief is about as solid as unicorn fantasists gluing an ice cream cone upside down on a horse’s snout and saying, “Proof!”:

Trump may be resolutely committed to fossil fuels, but the economic reality is renewables are now among the cheapest sources of electricity. Wind and solar were the biggest sources of power added to U.S. grids three years running, becoming key sources of jobs in rural America. That’s created clean-energy constituencies in North Carolina, Texas and other parts of the country that supported Trump in November.

Let’s start with that second claim first. It’s not true, as demonstrated by a careful analysis of this graph found at this Bloomberg article (not written by Joe Ryan):

Over the last three years, natural gas accounted for just under 34 percent of new energy capacity, while solar and wind accounted for about 32 percent and 29 percent, respectively. Furthermore, who knows how much more coal capacity would have been added if not for former President-I-Just-Got-Paid-$400,000-To-Give-A-Speech-To-A-Wall-Street-Firm’s War on Coal. Oh, and the War on Coal is government policy, not a market force.

As for the first claim that renewables are now among the cheapest sources of electricity well, that’s wonderful!

A new source of electricity that is cheaper than other sources—the producers of that energy are going to make a tidy sum! Surely producers are, say, putting up more solar panels so that consumers can see a drop in their utility bills? Or, if that’s not happening, investors are no doubt pouring loads of money into solar companies.

Hmmm … or maybe not. The big solar company SunEdison declared bankruptcy last year, as did Beamreach and Sungevity. Five other companies bit the dust in 2015.  Solar doesn’t appear to be a growth industry.

So, why is that? According to another article from Bloomberg (also not written by Joe Ryan):

The overall shift to clean energy can be more expensive in wealthier nations, where electricity demand is flat or falling and new solar must compete with existing billion-dollar coal and gas plants. But in countries that are adding new electricity capacity as quickly as possible, “renewable energy will beat any other technology in most of the world without subsidies,” said [BNEF chairman Michael] Liebreich….

When it comes to renewable energy investment, emerging markets have taken the lead over the 35 member nations of the Organization for Economic Cooperation & Development (OECD), spending $154.1 billion in 2015 compared with $153.7 billion by those wealthier countries, BNEF said. The growth rates of clean-energy deployment are higher in these emerging-market states, so they are likely to remain the clean energy leaders indefinitely, especially now that three-quarters have established clean-energy targets.

In other words, building wind turbines and solar cells may be cheaper than building coal plants in developing countries. Yet even that has its limits, according to the article: “Still, the buildup of wind and solar takes time, and fossil fuels remain the cheapest option for when the wind doesn’t blow and the sun doesn’t shine.” And that is one reason why solar and wind account for less than 3 percent of the energy in the U.S. (BTU= British thermal unit.)

As for jobs, the fact that Ryan has to put two industries together to make the number for renewables look more impressive should be an alarm bell that something is not right:

And, indeed, it is misleading.

The fact is we don’t have a very good idea how many people are employed in the solar industry. According to the 2017 Energy and Employment Report, the “solar sector is an example of the limitation of [Bureau of Labor Statistics] labor market data.” The report further notes:

Presently, BLS reports that utilities employ just over 2,800 workers for solar-specific generation. However, this figure does not count any jobs in the construction or other value chain industries for projects financed, owned, or directed by utilities…There are currently 373,807 Americans that spend some portion of their time working to manufacture, install, distribute, or provide professional services to solar technologies across the nation; of these, roughly seven in ten workers—or about 260,077—spend at least half of their time supporting the solar portion of business.

Thus, over 100,000 of those workers spend less than half their time working in the solar business. If we translate those into the equivalent of full-time jobs, then the number of those involved in the solar industry drops by at least 50,000.

But even if renewables employed more people, that’s not necessarily a good thing.  Ask yourself, what is the purpose of the energy industry? Is it the creation of jobs, or is it the creation of energy? If you said the latter, then coal and natural gas are clearly more efficient than solar and wind as it takes far fewer workers to generate energy from fossil fuels than renewable ones:

Whatever energy policy President Trump follows, it definitely should not be one that favors renewables over fossil fuels.

Crossposted at Bombthrowers.

This post originally appeared on American Spectator


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