This document discusses renewable energy policies and preferences. It summarizes that renewable energy sources like wind receive much larger subsidies per unit of energy produced than traditional sources. Critics argue that renewable subsidies distort energy markets and cost more than the energy is worth. Countries that have pursued aggressive renewable goals, like Germany and Spain, have faced much higher electricity costs with no clear environmental benefits.

1. Renewable Energy Realities
Real-World Considerations When Designing Preferences
Christopher Horner
Columbus, Ohio
December 2011

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6. Brought to us by ‘the smartest guys in the room’

7. Brought to us by ‘the smartest guys in the room’
‘Green jobs’ is born: John Palmissano post-Kyoto memo to Ken Lay, 12/97
Kyoto “is exactly what I have
been lobbying for”
"This agreement will be
Good for Enron stock!!"

8. Brought to us by ‘the smartest guys in the room’
‘Green jobs’ is born: John Palmissano post-Kyoto memo to Ken Lay, 12/97
Kyoto “is exactly what I have
been lobbying for”
"This agreement will be
Good for Enron stock!!"
 “if implemented, this agreement will do more
to promote Enron's business than will almost
any other regulatory initiative...”

9. Brought to us by ‘the smartest guys in the room’
‘Green jobs’ is born: John Palmissano post-Kyoto memo to Ken Lay, 12/97
Kyoto “is exactly what I have
been lobbying for”
"This agreement will be
Good for Enron stock!!"
 “if implemented, this agreement will do more
to promote Enron's business than will almost
any other regulatory initiative...”
 "Enron now has excellent credentials with many 'green‘ interests…This
position should be increasingly cultivated and capitalized on (monitized).”

10. NOT Capitalism

11. NOT Capitalism

12. NOT Capitalism

13. All Ran from Cap-n-Trade, ‘Climate’
Needed Re-Branding After Climategate Revelations

14. All Ran from Cap-n-Trade, ‘Climate’
Needed Re-Branding After Climategate Revelations
 “This is not an environment bill” –
Senate bill lead author Sen. John Kerry
 Oddly, amends CAA, grants power to EPA
 Does mention ‘environment’… 97 times
 ‘Climate’…220 times
 ‘Greenhouse’ 650 more times
 Odd, non? Yet…he’s right…

15. All Ran from Cap-n-Trade, ‘Climate’
Needed Re-Branding After Climategate Revelations
 “This is not an environment bill” –
Senate bill lead author Sen. John Kerry
 Oddly, amends CAA, grants power to EPA
 Does mention ‘environment’… 97 times
 ‘Climate’…220 times
 ‘Greenhouse’ 650 more times
 Odd, non? Yet…he’s right…

16. Pres. Obama Got the Memo
Re-Branding, All Around

17. Pres. Obama Got the Memo
Re-Branding, All Around
 “With Congress unlikely to push climate
legislation anytime soon... ‘[Obama]
may not talk about climate change so
much - but will backdoor [it] through
clean energy’...” -- Supporter of ‘clean energy economy’ agenda,
former EPA chief Christine Todd Whitman to Politico June 23, 2011

18. ‘Spain is our model’: Claro!

19. ‘Spain is our model’: Claro!

20. ‘Spain is our model’: Claro!

21. • The rate deficit, manly caused by
the feed-in-tariff system to support
renewable energies, “is deeply
harming the system and puts at risk
not only the financial situation of
the electric sector companies but
also sustainability of the system
itself. This disadjustment turns out
to be unsustainable and has grave
consequences since it deteriorates
the security and financial capacity
of the investments necessary for
providing electricity at the levels of
quality and security the the Spanish
society demands.”

22. About Germany…

23. About Germany…
 “[A]lthough Germany’s promotion of
renewable energies is commonly portrayed
in the media as setting a ‘shining example in
providing a harvest for the world’ (The
Guardian 2007), we would instead regard the
country’s experience as a cautionary tale of
massively expensive environmental and
energy policy that is devoid of economic
and environmental benefits.” -- November 2009

24. About Germany…
 “[A]lthough Germany’s promotion of
renewable energies is commonly portrayed
in the media as setting a ‘shining example in
providing a harvest for the world’ (The
Guardian 2007), we would instead regard the
country’s experience as a cautionary tale of
massively expensive environmental and
energy policy that is devoid of economic
and environmental benefits.” -- November 2009

26. No Longer Even
Pretending Otherwise
• “European consumers will need to be get used in
coming years to significantly higher energy prices.
The household expenditure for energy will double
by 2030. This comes from an internal draft EU
energy policy paper...
• Currently households pay 7 to 8 percent of their
income on energy. The draft policy that would rise
to 15 percent in 2030...
• The price of electricity will rise in 2030 adjusted for
inflation up to 50 percent, but then decline slightly.”

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35. Please, Then Tell Us More
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36. Please, Then Tell Us More
 “The more people know about the wind-
energy business, the less they like it.”*
 Wind energy communications strategist Justin
Rolfe-Redding, a GMU doctoral student from the
Center for Climate Change Communication
 Want more? “The things people are educated
about are a real deficit for us.”
 *March 23 webinar of American Council on Renewable Energy “Speaking Out on
Renewable Energy: Communications Strategies for the Renewable Energy Industry.”
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37. EIA, October 2011

38. EIA, October 2011

39. EIA, October 2011

40. EIA, October 2011

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69. Why Was That So Hard?
 “In a document seen by The Wall Street
Journal, the European Commission's energy
department says... ‘There is a trade-off
between climate change policies and
competitiveness...The commission is
particularly worried that EU industry would
lose competitiveness against companies from
other parts of the world as its costs would be
higher. EU companies would likely pay higher
electricity prices because clean power
production would be more expensive’.” 16

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79. 20%, 0.2%, All Good. Still, Just Curious But:
“Isn’t it time we began investing in...”?

80. All of Which Affirms The Basics
“The Energy Aftermath: How We Can Learn from the Blunders of the Past to Create a Hopeful
Energy Future”, Thomas Lee, BC Ball, Jr., Richard Tabors, Harvard Univ. Press 1990.

81. All of Which Affirms The Basics
 As memorably expressed by three MIT scholars in their
retrospective on Carter-era energy programs:
“The Energy Aftermath: How We Can Learn from the Blunders of the Past to Create a Hopeful
Energy Future”, Thomas Lee, BC Ball, Jr., Richard Tabors, Harvard Univ. Press 1990.

82. All of Which Affirms The Basics
 As memorably expressed by three MIT scholars in their
retrospective on Carter-era energy programs:
“The Energy Aftermath: How We Can Learn from the Blunders of the Past to Create a Hopeful
Energy Future”, Thomas Lee, BC Ball, Jr., Richard Tabors, Harvard Univ. Press 1990.

83. All of Which Affirms The Basics
 As memorably expressed by three MIT scholars in their
retrospective on Carter-era energy programs:
 The experience of the 1970s and 1980s
taught us that if a technology is
commercially viable, then government
support is not needed and if a technology
is not commercially viable, no amount of
government support can make it so.
“The Energy Aftermath: How We Can Learn from the Blunders of the Past to Create a Hopeful
Energy Future”, Thomas Lee, BC Ball, Jr., Richard Tabors, Harvard Univ. Press 1990.

85. News flash from 1891…1976… 2011:
Renewables just 20 years away!

87. “It’s Unfair!”

88. Real Energy Unfairly Subsidized?

89. Real Energy Unfairly Subsidized?
 The U.S. Energy Information Administration
reported in 2008, on a dollar per MWh basis, the
U.S. government subsidizes wind at $23.34 – and
reliable energy sources: natural gas $0.25; coal at
$0.44; hydro at $0.67; and nuclear at $1.59,
leading to what some U.S. commentators call “a
huge corporate welfare feeding frenzy.”

90. Real Energy Unfairly Subsidized?
 The U.S. Energy Information Administration
reported in 2008, on a dollar per MWh basis, the
U.S. government subsidizes wind at $23.34 – and
reliable energy sources: natural gas $0.25; coal at
$0.44; hydro at $0.67; and nuclear at $1.59,
leading to what some U.S. commentators call “a
huge corporate welfare feeding frenzy.”

91. Real Energy Unfairly Subsidized?
 The U.S. Energy Information Administration
reported in 2008, on a dollar per MWh basis, the
U.S. government subsidizes wind at $23.34 – and
reliable energy sources: natural gas $0.25; coal at
$0.44; hydro at $0.67; and nuclear at $1.59,
leading to what some U.S. commentators call “a
huge corporate welfare feeding frenzy.”
 The Wall Street Journal advises that “wind
generation is the prime example of what can go
wrong when the government decides to pick
winners.” (Well, actually, they pick losers)

92. Not For Lack of Trying
I suppose pointing this out is ‘unfair’, too?
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93. The Human Costs of an Emissions War

94. The Human Costs of an Emissions War
 Raising energy costs kills. According to a Johns Hopkins
study, replacing ¾ of US coal-based energy with higher
priced energy would lead to 150,000 extra premature
deaths annually in the US alone.

95. The Human Costs of an Emissions War
 Raising energy costs kills. According to a Johns Hopkins
study, replacing ¾ of US coal-based energy with higher
priced energy would lead to 150,000 extra premature
deaths annually in the US alone.

96. The Human Costs of an Emissions War
 Raising energy costs kills. According to a Johns Hopkins
study, replacing ¾ of US coal-based energy with higher
priced energy would lead to 150,000 extra premature
deaths annually in the US alone.
 Reducing emissions hits the poorest hardest. According
to the Congressional Budget Office, a cap and trade
system aimed at reducing emissions by just 15 percent
will cost the poorest quintile 3 percent of their
annual household income, while benefiting the
richest quintile.

97. The Human Costs of an Emissions War
 Raising energy costs kills. According to a Johns Hopkins
study, replacing ¾ of US coal-based energy with higher
priced energy would lead to 150,000 extra premature
deaths annually in the US alone.
 Reducing emissions hits the poorest hardest. According
to the Congressional Budget Office, a cap and trade
system aimed at reducing emissions by just 15 percent
will cost the poorest quintile 3 percent of their
annual household income, while benefiting the
richest quintile.

98. The Human Costs of an Emissions War
 Raising energy costs kills. According to a Johns Hopkins
study, replacing ¾ of US coal-based energy with higher
priced energy would lead to 150,000 extra premature
deaths annually in the US alone.
 Reducing emissions hits the poorest hardest. According
to the Congressional Budget Office, a cap and trade
system aimed at reducing emissions by just 15 percent
will cost the poorest quintile 3 percent of their
annual household income, while benefiting the
richest quintile.
 Raising energy costs loses jobs. According to a Penn
State University study, replacing 2/3 of US coal-based
energy with higher-priced energy will cost almost 3
million jobs, and perhaps over 4 million.

99. The poor bear a disproportionate burden
when it comes to increasing energy prices*
*‘But don’t worry, we’ll just tax Big Business!’
U.S. Energy Costs as Percentage of Average Annual After-Tax Household Income
< $10K $10K - $30K $30K - $50K > $50K
SOURCE: “Energy Cost Burdens on American Families,” American Coalition for Clean Coal Electricity

100. China’s Doing it!
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101. Coal is China’s Present
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102. Coal is China’s Present
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106. You’re kidding me, right?

107. You’re kidding me, right?

108. You’re kidding me, right?

111. Coal is China’ Future, Too
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112. Coal is China’ Future, Too
 From parity with the U.S. around 2005,
China’s CO2 emissions will grow to roughly
double America’s in 2012
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113. Coal is China’ Future, Too
 From parity with the U.S. around 2005,
China’s CO2 emissions will grow to roughly
double America’s in 2012
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114. Coal is China’ Future, Too
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115. Coal is China’ Future, Too
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116. China’s Doing It!
Uh, What happened to ‘Spain!’? Anyway. OK, I’ll bite.
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117. China’s Doing It!
Uh, What happened to ‘Spain!’? Anyway. OK, I’ll bite.
 Sec. Chu says China “winning ‘clean energy race’”
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118. China’s Doing It!
Uh, What happened to ‘Spain!’? Anyway. OK, I’ll bite.
 Sec. Chu says China “winning ‘clean energy race’”
 Misunderstands China’s role in economy
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119. China’s Doing It!
Uh, What happened to ‘Spain!’? Anyway. OK, I’ll bite.
 Sec. Chu says China “winning ‘clean energy race’”
 Misunderstands China’s role in economy
 Says only way to match them is ‘cap carbon’
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120. China’s Doing It!
Uh, What happened to ‘Spain!’? Anyway. OK, I’ll bite.
 Sec. Chu says China “winning ‘clean energy race’”
 Misunderstands China’s role in economy
 Says only way to match them is ‘cap carbon’
 You mean...like China? Gee, I hate to break it to you...
43

121. China’s Doing It!
Uh, What happened to ‘Spain!’? Anyway. OK, I’ll bite.
 Sec. Chu says China “winning ‘clean energy race’”
 Misunderstands China’s role in economy
 Says only way to match them is ‘cap carbon’
 You mean...like China? Gee, I hate to break it to you...
43

122. Chu on China, Cont...
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123. Chu on China, Cont...
 So, also misunderstands what China’s doing
 Here’s your test:
 Sold! I’ll take China’s deal
 No? Why not? Was “CDI!” Just a TP? (like ‘Spain!’?)
44

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136. Bubble Bursting
Social Unrest to Follow
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137. Bubble Bursting
Social Unrest to Follow
49

138. Bubble Bursting
Social Unrest to Follow
 China just imposed a feed-in tariff
49

139. Bubble Bursting
Social Unrest to Follow
 China just imposed a feed-in tariff
 That which has helped bankrupt Spain
49

140. Bubble Bursting
Social Unrest to Follow
 China just imposed a feed-in tariff
 That which has helped bankrupt Spain
 The reason? Their customers went broke
49

141. Bubble Bursting
Social Unrest to Follow
 China just imposed a feed-in tariff
 That which has helped bankrupt Spain
 The reason? Their customers went broke
 Their industry only existed due to subsidies
49

142. Bubble Bursting
Social Unrest to Follow
 China just imposed a feed-in tariff
 That which has helped bankrupt Spain
 The reason? Their customers went broke
 Their industry only existed due to subsidies
 Now that those must be cut, they’re hurt
49

143. Bubble Bursting
Social Unrest to Follow
 China just imposed a feed-in tariff
 That which has helped bankrupt Spain
 The reason? Their customers went broke
 Their industry only existed due to subsidies
 Now that those must be cut, they’re hurt
 They’ll retool. But hoping to ride it out
49

144. Bubble Bursting
Social Unrest to Follow
 China just imposed a feed-in tariff
 That which has helped bankrupt Spain
 The reason? Their customers went broke
 Their industry only existed due to subsidies
 Now that those must be cut, they’re hurt
 They’ll retool. But hoping to ride it out
 So biting the bullet to keep bubble inflated
49

145. China, Wind Leader?
Eating Our Lunch in The Great Windmill Race?

146. China, Wind Leader?
Eating Our Lunch in The Great Windmill Race?
 4.7 GWe to 8.5 Gwe

147. China, Wind Leader?
Eating Our Lunch in The Great Windmill Race?
 4.7 GWe to 8.5 Gwe

148. China, Wind Leader?
Eating Our Lunch in The Great Windmill Race?
 4.7 GWe to 8.5 Gwe
 That’s the nominal* electrical generating
capacity of wind installed in China in 2008
as compared to that installed in the US

149. China, Wind Leader?
Eating Our Lunch in The Great Windmill Race?
 4.7 GWe to 8.5 Gwe
 That’s the nominal* electrical generating
capacity of wind installed in China in 2008
as compared to that installed in the US

150. China, Wind Leader?
Eating Our Lunch in The Great Windmill Race?
 4.7 GWe to 8.5 Gwe
 That’s the nominal* electrical generating
capacity of wind installed in China in 2008
as compared to that installed in the US
 So much for the claim that China is leading
in wind…would that it were so!

151. China, Wind Leader?
Eating Our Lunch in The Great Windmill Race?
 4.7 GWe to 8.5 Gwe
 That’s the nominal* electrical generating
capacity of wind installed in China in 2008
as compared to that installed in the US
 So much for the claim that China is leading
in wind…would that it were so!
 They had a big year, driven by EU policy

152. China, Wind Leader?
Eating Our Lunch in The Great Windmill Race?
 4.7 GWe to 8.5 Gwe
 That’s the nominal* electrical generating
capacity of wind installed in China in 2008
as compared to that installed in the US
 So much for the claim that China is leading
in wind…would that it were so!
 They had a big year, driven by EU policy
 Will re-purpose all in a Shanghai minute

153. China—the reality

154. China—the reality
 EIA data for 2008 (the most recent year available) indicates
China added more than 5 times the total generating capacity
that the United States did (79 GW to 15 GW (!)).

155. China—the reality
 EIA data for 2008 (the most recent year available) indicates
China added more than 5 times the total generating capacity
that the United States did (79 GW to 15 GW (!)).

156. China—the reality
 EIA data for 2008 (the most recent year available) indicates
China added more than 5 times the total generating capacity
that the United States did (79 GW to 15 GW (!)).
 So …windmills, and solar, right? Hardly.

157. China—the reality
 EIA data for 2008 (the most recent year available) indicates
China added more than 5 times the total generating capacity
that the United States did (79 GW to 15 GW (!)).
 So …windmills, and solar, right? Hardly.

158. China—the reality
 EIA data for 2008 (the most recent year available) indicates
China added more than 5 times the total generating capacity
that the United States did (79 GW to 15 GW (!)).
 So …windmills, and solar, right? Hardly.
 China added 26 gigawatts of hydroelectric capacity, US = 0

159. China—the reality
 EIA data for 2008 (the most recent year available) indicates
China added more than 5 times the total generating capacity
that the United States did (79 GW to 15 GW (!)).
 So …windmills, and solar, right? Hardly.
 China added 26 gigawatts of hydroelectric capacity, US = 0
 China added 47 GW thermal (mostly coal), U.S. = 6 (mostly gas)

160. China—the reality
 EIA data for 2008 (the most recent year available) indicates
China added more than 5 times the total generating capacity
that the United States did (79 GW to 15 GW (!)).
 So …windmills, and solar, right? Hardly.
 China added 26 gigawatts of hydroelectric capacity, US = 0
 China added 47 GW thermal (mostly coal), U.S. = 6 (mostly gas)
 That’s almost 8 times more thermal capacity

161. China—the reality
 EIA data for 2008 (the most recent year available) indicates
China added more than 5 times the total generating capacity
that the United States did (79 GW to 15 GW (!)).
 So …windmills, and solar, right? Hardly.
 China added 26 gigawatts of hydroelectric capacity, US = 0
 China added 47 GW thermal (mostly coal), U.S. = 6 (mostly gas)
 That’s almost 8 times more thermal capacity
 And, on a carbon dioxide-emitting basis, over 15 times more

162. China—the reality
 EIA data for 2008 (the most recent year available) indicates
China added more than 5 times the total generating capacity
that the United States did (79 GW to 15 GW (!)).
 So …windmills, and solar, right? Hardly.
 China added 26 gigawatts of hydroelectric capacity, US = 0
 China added 47 GW thermal (mostly coal), U.S. = 6 (mostly gas)
 That’s almost 8 times more thermal capacity
 And, on a carbon dioxide-emitting basis, over 15 times more
 Wind? China added 6 GW, the United States 8 (33% more)

163. China—the reality
 EIA data for 2008 (the most recent year available) indicates
China added more than 5 times the total generating capacity
that the United States did (79 GW to 15 GW (!)).
 So …windmills, and solar, right? Hardly.
 China added 26 gigawatts of hydroelectric capacity, US = 0
 China added 47 GW thermal (mostly coal), U.S. = 6 (mostly gas)
 That’s almost 8 times more thermal capacity
 And, on a carbon dioxide-emitting basis, over 15 times more
 Wind? China added 6 GW, the United States 8 (33% more)
 US added more ‘renewable’ than conventional past three years