Energy Economics Mythbusters: Claims Renewables Create Real & Lasting Jobs Just Fake News
One “justification” put up by the wind industry and its parasites for the social and economic chaos caused by spiralling power costs and – in places like notionally wind ‘powered’ South Australia – load shedding and blackouts (caused by daily wind power output collapses) is the claim that investment in wind power would create a “new” economy with millions of groovy “green” jobs.
No better case study to debunk that myth than Germany, which went into wind power harder and faster than anyone else: the cost of doing so is catching up with a vengeance. The subsidies have been colossal, the impacts on the electricity market chaotic and – contrary to the purpose of the policy – CO2 emissions are rising fast (see our post here).
True it was that Germany saw an increase in renewables related employment – the bulk of it in the development and manufacture of solar panels – but all of it was built on a raft of taxpayer and power consumer subsidies: it was – therefore – economically unsustainable.
Any job that relies on a subsidy results in a loss of employment elsewhere in the economy.
In Germany, the subsidies for “green” jobs are paid for in rocketing power prices, which impacts on the profitability and competitiveness of all businesses and industries. German manufacturers – and other energy intensive industries – faced with escalating power bills are set to pack up and head to the USA – where power prices are 1/3 of Germany’s (see our posts here and here and here).
In the result, Germany faces a decline in industrial output and, therefore, declining employment.
The renewables subsidy story in Spain is no different.
The Spaniards have thrown 100s of billions of euros in subsidies at solar and wind power, and have achieved nothing but economic punishment in return. The much touted promise of thousands of so-called “green” jobs never materialized. No surprises there. Instead, the insane cost of subsidising wind and solar power killed off productive industries; over the course of its ‘transition’ to wind and solar the general unemployment rate rocketed from 8% to 26% – with youth unemployment nudging 50% in many regions (see our post here). For an insight on the Spanish renewables disaster see the study produced by the Institute for Energy Research available here.
In Spain, just as here, the great bulk of employment in the wind industry involves fleeting construction work (once the turbines are up, there’s nought to do) – of the jobs created:
“two-thirds of which came in construction, fabrication and installation, one quarter in administrative positions, marketing and projects engineering, and just one out of ten jobs has been created at the more permanent level of actual operation and maintenance”.
That the Spaniards had to stump up “subsidies of more than €1 million” to create each wind industry job; that each wind industry job thus created, killed off 2.2 jobs elsewhere in the economy; and that each MW of wind power capacity installed destroyed 4.27 jobs – is nothing short of an economic disaster (see our post here).
In Australia, one of the panicked “pitches” being made by the wind industry and its parasites is that winding back the LRET will costs tens of thousands of jobs. Never mind that the wind industry has generated only a handful of permanent jobs in Australia; that the bulk of the jobs created were in fleeting construction work; and that new wind farm construction has more or less ground to a halt: “investment” in the construction of wind farms went from $2.69 billion in 2013 to a piddling $40 million in 2014 (see this article); and the number of projects being built today can be counted without removing your shoes.
The handful of permanent jobs (as well as fleeting construction work) created in Australia’s wind industry were all the product the mandatory Large-Scale Renewable Energy Target (LRET) and the Renewable Energy Certificates (RECs) issued to wind power generators under it. The REC is a Federal Tax on all Australian power consumers paid as a direct subsidy to wind power outfits.
So far, the REC Tax/Subsidy has cost Australian power consumers around $14 billion and – if the LRET remains – will add a further $42 billion to power bills over the next 15 years (see our post here).
It’s the cost impact on power prices of that massive subsidy stream that has energy intensive industries – like mineral processing and mining – besides themselves, as rocketing power costs and the erratic delivery destroy their profitability and any hope of expansion and the jobs that might have been created with that investment: South Australia’s Wind Power Disaster Kills BHP’s Plans to Expand Olympic Dam Mine
When the “wind industry creates jobs” mantra is being chanted, what the Clean Energy Council and Infigen & Co don’t say is that every single wind industry job “created” depends entirely on the mandatory RET and the RECs issued to wind power outfits under it.
A subsidy – such as the REC – paid to “create” a job in one part of an economy, means that a job (or jobs) will, inevitably, be lost elsewhere. A study by UK Versa Economics found that for every job created in the wind industry 3.7 jobs are lost elsewhere in the UK economy (see our post here).
One Australian study has forecast that the current mandatory RET will kill over 6,000 jobs (see our post here).
The idea of wind industry job “creation” is like robbing Peter to pay Paul, except that the thief has to filch $4 from Peter to end up handing $1 to Paul.
As the Germans, Spaniards and Brits are learning fast, any policy that is unsustainable will, eventually, fail or compel its creators to scrap it. The mandatory LRET is no exception.
So, next time you hear the spin masters from the CEC, AGL, Infigen & Co railing about changes to the LRET resulting in massive job losses, they’re not talking about real Australian jobs in industry, mining, mineral processing and manufacturing – it’s their own REC subsidy fuelled jobs that they’re worried about (see our posts here and here).
The same type of ‘renewables create jobs’ propaganda gets peddled in the US, aimed at deflecting attention from the fact that, despite massive subsidies and mountains of mandated ‘investment’ in wind and solar, the pair add (depending on the weather, of course) a trifling 2% to America’s energy supply.
Renewable energy myths abound
12 April 2017
Over the past year “alternative facts” and “fake news” have become regrettable buzzwords used to dismiss any viewpoint that does not support one’s own preconceived notions.
But when it comes to renewable energy, there truly are numerous myths that perpetuate throughout the media and culture that are not supported by any fair reading of the available data.
Renewable-energy advocates often argue that we don’t need jobs in the fossil-fuels industry because solar and wind have become “engines for green and sustainable jobs.” As evidence, many groups have cited a report published by the U.S. Department of Energy that purportedly shows more people are working in the solar industry than in fossil-fuel power generation.
According to the report, 374,000 people are employed by the solar-generation industry, approximately 102,000 are employed by wind, and just 187,000 people are employed generating electricity from oil, coal, and natural gas. On its face, it seems as if wind and solar truly are the job creators and fossil fuels are dinosaurs awaiting extinction. That’s not the case.
It’s true the DOE report says approximately 374,000 people work in the solar-energy industry, but this number isn’t just full-time jobs. It includes part-time. Only about 260,000 spend at least half their time working in the solar industry.
Economists, to compare competing industries, typically estimate how many full-time equivalent jobs exist or are being created. Unfortunately, the study did not use this metric, and the report is missing citations for footnotes 32 and 33, which are supposed to support their claims about jobs in the solar industry.
Another interesting “alternative fact” about the jobs created by wind and solar power is that a large portion of these jobs are construction jobs, the same kinds of positions that were routinely denigrated by renewable-energy advocates during debates about the Keystone XL and Dakota Access Pipelines. In 2016, 36.7 percent of jobs in the solar industry and 37.2 percent of jobs in the wind industry were construction jobs.
All we can truly conclude from the report is solar creates part-time, temporary jobs that come at a massive expense to taxpayers and consumers.
Many renewable-energy advocates claim solar and wind are cost-competitive with fossil fuels, but the facts show otherwise. A study from the Brookings Institution found electricity generated from wind costs at least twice as much as coal or natural gas, and solar costs at least three times as much as conventional sources. The only reason the wind and solar industries are still in operation, or were even built up in the first place, is because they receive more subsidies than every other form of energy combined.
According to data provided by the U.S. Energy Information Administration, in 2013, wind received $5.9 billion in taxpayer handouts, mainly in the form of the Wind Production Tax Credit. Solar receives $5.3 billion annually, mostly from a 30 percent federal tax credit. Additional federal and state incentives for solar systems make buying these panels virtually free. These subsidies have continued to grow every year.
Even with all these subsidies, solar and wind provide just 0.4 and 1.8 percent of the United States’ total energy use, respectively. On the other hand, coal provides 18 percent of total energy use, natural gas provides 28 percent, and oil generates 35 percent of total energy consumption.
Wind and solar should be required to compete on a truly level playing field with other forms of energy, which would mean repealing the 30 percent federal tax credit for solar power and the other handouts keeping renewable energy afloat.
Isaac Orr is a research fellow at The Heartland Institute.