Robert Bryce is the author of some very good books on the topic of energy, including “Power Hungry”, which I reviewed recently on my blog, and the newest one “Smaller Faster Lighter Denser Cheaper: How Innovation Keeps Proving the Catastrophists Wrong” which I am currently reading.
Bryce has recently written a very detailed piece on National Review about the looming failure of SunEdison, a company that touts itself as the “largest global renewable energy development company.”
Some points are raised by Robert Bryce in his piece, and they are worth mentioning:
Even $1.5 billion in subsidies and loan guarantees can’t save a “clean” energy company from bankruptcy. […] But the remarkable thing about SunEdison is how much cash it was able to get from state and federal taxpayers during its low-emissions trip to bankruptcy court.
Alas, SunEdison isn’t the only example of how federal taxpayers have helped prop up poor management in the “clean energy” sector. Earlier this week, the Spanish energy company Abengoa SA filed for Chapter 15 protection in U.S. bankruptcy court in Wilmington, Del., claiming some $16.5 billion in debt. Like SunEdison, Abengoa has been a leading promoter of solar projects in the U.S. According to Subsidy Tracker, Abengoa has received $986 million in federal grants and tax credits, as well as another $7.8 million in state and local subsidies. The bulk of that sum — about $841 million — was for solar projects.
In all, Abengoa got some $2.6 billion in federal loans and loan guarantees as well as $986 million in federal grants and tax credits. Thus, between the collapse of Abengoa and the looming bankruptcy of SunEdison, federal taxpayers have shelled out some $5 billion in direct grants and loan guarantees to lousy management teams in subsidy-dependent businesses that would never have grown to their current size had they not been able to binge on taxpayer cash.
5 billion dollars in direct grants and loan guarantees to companies which went bankrupt very quickly, regardless of how much taxpayer’s money has been shelled by the government. 5 billion dollars.
Critics of the federal government’s support for “clean energy” companies have repeatedly claimed that the government shouldn’t be “picking winners.” To that, I can only say that the evidence — from the failed solar company Solyndra and failed battery companies like Ener1 and A123 to SunEdison and Abengoa — proves that the government hasn’t in fact, been picking winners. Quite the opposite.
It is quite obvious to me that we are once again witnessing how a government tries hard to force the free market to take a specific route, but sooner or later it is bound to fail. Governments should never pick sides, but if they do, it would be better if they would pick winners and not losers.
For those who have been reading Robert Bryce’s books, this should not come as a surprise. After all, in “Smaller Faster Lighter Denser Cheaper: How Innovation Keeps Proving the Catastrophists Wrong” Bryce is pretty clear on what characteristics are needed for a technology to displace a previous technology: solar power is NOT Smaller nor Faster nor Lighter, and most definitely neither Denser nor, quite obviously, Cheaper.
Solar power is still a very interesting way to generate electricity, but governments should let the market decide in what form solar will be used. And no government is doing this today, unfortunately. This is sadly why we will still see more failures like the ones of SunEdison and Abengoa in the future.