The Green Jobs Myth

Here is the reality of the green jobs myth Obama is pushing (via a reader):

The Arizona Corporation Commission raised the monthly charge that Arizona Public Service Co. residential customers will pay in 2009 to support renewable energy to $3.17 a month from $1.32 a month.

That's a 140 percent increase for the maximum tariff on people living in homes and apartments. Businesses would see their monthly charge increase to a maximum of to $117.93 from $48.84.

Large industrial customers could see tariffs of $353.78, compared with the current cap of $146.53.

The tariffs will be worth an estimated $78.4 million to the utility, which uses the money to acquire renewable energy and pay incentives to people who use rooftop solar and other renewables.

Nothing says "jobs creation" like increasing electricity prices.  Note that these prices are "per meter."  Since many businesses have many meters (we have nearly 100 in Arizona), the price increase is much higher.  For example, we expect to see a $2-$5 thousand dollar increase next year from this program.

Oh, but you say that this money is invested and creates jobs?  Yeah, right. )  via Michael Giberson

A power producer typically gets paid for the power it generates. In Texas, some wind energy generators are paying to have someone take power off their hands.

Because of intense competition, the way wind tax credits work, the location of the wind farms and the fact that the wind often blows at night, wind farms in Texas are generating power they can't sell. To get rid of it, they are paying the state's main grid operator to accept it. $40 a megawatt hour is roughly the going rate.

This is really incredible.    The power companies are constructing wind turbines and, at certain times, not only providing the power for free but actually paying the grid to take it.  All to capture subsidies and tax credits paid for by these special rate surcharges.    The only jobs being created are analysts trying to find the best way to rent-seek under these new laws.  I would rather pay people to dig holes and fill them back in.

  • http://www.accountingtips4you.com Mike Harmon

    Great post. I will read your posts frequently. Added you to the RSS reader.

  • jon spencer

    With the wind generators when the electric demand is not there they could,
    1. Run air compressors and store the compressed air to run gas turbine generators.
    Might have to build a extra pipeline or use old gas wells to store the compressed air.
    2. Run pumps to push water uphill to a reservoir.
    There are a few electric companies right now that buy electricity at low demand time to pump water uphill and then when demand and price go up they let the water down the penstocks and to the generators and sell it, and make a profit on the difference.
    Both of these ideas are almost instant on which is a lot easier on a electric companies planing, think on how long it takes to get a boiler warm and producing steam.
    These are not quick fixes, they require lots of engineering and quite a bit of money too.
    But once built and producing the cost recovery should be fairly quick.

  • http://herdgadfly.blogspot.com gadfly

    "I would rather pay people to dig holes and fill them back in."

    John Hawkins agrees with you.

    http://herdgadfly.blogspot.com/2008/12/in-violation-of-first-law-of-holes.html

  • joshv

    @jon

    Both solutions require accidents of geography which are sadly rare. Hills aren't known to frequent areas with the best wind, and underground cavities aren't necessarily near windmill farms.

  • Sandy Chan

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  • Thalpy

    We need to dispense with the nonsense. We should optimize the performance of what we already have and properly train technicians to maintain our equipment. It's been suggested that only about 40% of the air conditioners in use today are charged correctly. What does that mean to "green?" An air conditioning unit that does not contain the correct amount of refrigerant in it will still remove the heat from a conditioned space, but it will take longer than it should or could. Taking care of this one issue would make a profound difference in two areas: first, the equipment's running and wear time would be reduced, and second, the result would be a lower power bill.

    Bill Harrison, the current President of ASHRAE, has chosen maintenance as his theme or emphasis for 2008-2009. This is an excellent choice and should not go unheeded. Excellent equipment, improperly maintained, is of little value to us.

  • xpatUSA

    @coyote: "wind farms in Texas are generating power they can’t sell. To get rid of it, they are paying the state’s main grid operator to accept it."

    "Get rid of it" ?? Spoken as if, when the wind blows, the blades turn and electricity is generated uncontrollably. I am at a loss to understand why wind turbines can not be feathered/stopped and their generators can not be disconnected electrically from the distribution system. All electrical generators are provided with big switches (breakers). All "drivers" i.e. windmills, gas/air/steam/water turbines, diesel/gasoline engines can be stopped or de-coupled from the generator.

    @Jon: It takes energy to compress air and a lot of energy is lost as heat. Also an air turbine runs best at constant inlet pressure, so more energy is lost thru pressure regulation. That system is likely to be costly and inefficient.

    The only air-turbine I've ever seen is the last-resort RAT (ram-air turbine) on the British Vulcan Bomber. If all 4 engines fail, and the Rover APU (auxiliary power unit) won't start, the crew pulls a lever to drop the RAT into the airstream. If they don't, the PFCs (electric-powered flying controls) stop working - very bad news!

    T.C.

  • David Smith

    @xpatUSA

    The only reason the windfarms exist is the tax subsidy which is based on selling KWH. No sales, no subsidy. Thus they can pay the grid to take the KWH and still be better off than shutting down.

    http://www.ncpa.org/studies/renew/renew2c.html

  • rxc

    The best way to deal with the internittent nature of wind&solar is to have those systems provide energy to the people who want them, when they are available, and let them sit in the dark when they are not running. If people want backup power supplies, they can install their own batteries in their houses, and their own transfer switches and inverters. Let the unitiated try to run their own electrical systems for a while, and they will see what it takes to make sure that the lights go on whenever you want to flip the switch. I predict that the females in the house will quickly lose interest in the experiment, and force a changeover to a "non-renewable", but more reliable, form of energy.

  • K

    I live in the APS service area. The increased rates don't matter to me but they are a tax if you regard a tax as an expense mandated by government.

    Then the very poorest apply for and get a subsidy which requires oversight by government workers. So civil servants get more benefit from forced alternative energy than anyone else.

    Don't ask me for a solution. We need alternative energy eventually and until it costs less than fossil or nuclear we are going to pay. Pay in money and regulation and aggravation.

    I don't want to see all those GD windmills so I hope solar prevails.

    Someone mentions underground cavities. There is some potential to store unused wind power as compressed air. But in reality there should be little or no unused wind or solar power. Both should be consumed first and leave fossil and hydro as the last resort.

    I might mention that attempts to store power as compressed air have not be very successful for over a century. There is a lot of heat in air and you can't simply pump it to high pressure underground. Eventually that will weaken or even melt stone. I suppose there are professions which deal with such problems, I'll call them engineers.

    Jon Spencer and others point to water as the storage medium. I think it is a better bet than air.

  • rxc

    Pumped storage is indeed a good idea, but you need the proper geometry to make it work, and unfortunately, all the places that have the proper geometry are either "fragile ecosystems" or "areas of great natural beauty deserving protection". So, there is nowhere that pumped storage can be built. Those people who advocate it should be required to point to the place where it will be built.

  • markm

    A compressed-air storage system doesn't need any particular geography, just room for a collection of huge pressure tanks - and a local government willing to allow the installation of potential bombs... But consider the capital costs. The cheapest turbine and alternator set to extract a given amount of power would be pretty much the same as the steam turbine and alternator from a coal plant of the same capacity, and I believe that equipment is most of the cost of a coal-fired plant. But you also need either a separate motor/compressor set of similar size, or to use a considerably more expensive reversible set in place of the turbine/alternator. And the pressure tanks, and whatever space or explosion-containment construction is needed around them for safety. So just for the storage facility, you spend several times as much up front as with a coal-fired plant, and possibly as much as a nuclear plant would cost if it didn't take decades to get the plans approved.

    There is one way this could make economic sense: if you can buy power much cheaper than the cost of coal, by buying it at times when the renewable sources (or nuke plants run continually at optimal load) are producing an excess. But the problem is, wind and solar sources are not currently making power much more cheaply than coal plants. They also have huge capital investments to pay off. In the case of solar panels, it is questionable whether all the electricity produced in the 20 or 30 year lifetime of the panels is worth the initial investment, unless it can be sold at a premium rather than at a discount from fossil-fuel-derived power. Wind turbines and movable-mirror steam solar plants are somewhat less expensive (but definitely more expensive than fossil-fuel plants), but these are also high-maintenance.

  • Allen

    Don't worry..... Gov. Ritter in Colorado created 90,000 Green Jobs - or so he claims - in his first 22 months in office. Surely if he can do it here, it'll happen in Arizona too. ;)

  • http://ccoffer.wordpress.com/ ccoffer

    Its easy to make 5 million "green" jobs. Simply start with 10 million jobs, and get to work on turning into 5 million.