Lifecycle anchored in politics dooms renewable energy

Dec. 22, 2011
Because the world needs renewable energy, renewable energy needs a new lifecycle.

Because the world needs renewable energy, renewable energy needs a new lifecycle.

The current lifecycle is anchored in politics. At its start, renewable energy is marketed as lovable in opposition to odious fossil energy so as to generate support for the subsidies and mandates lovable energy needs in order to compete.

Governments enact the mandates. They install the subsidies. Flows of public money committed to uneconomic enterprise cultivate projects that never could have been developed in any other way.

So what if sponsors of some of those projects turn out to be friends of officials disbursing the funds?

Unassailable ideals are in play: salvation of the environment, lowered dependency on energy from abroad, green jobs. It’s all an investment. Lovable energy surely will find its economic footing, it is said, and odious oil, gas, and coal will become mere smudges on the otherwise tidy tapestry of history.

But the lifecycle never reaches that happy stage.

At first, prospects seem bright. Money available by grant from the state arouses natural enthusiasm. To accommodate unexpected demand, which is taken as evidence of program success, the state grants more. Public spending on lovable energy grows.

Eventually, however, the lifecycle heads south. Lovable-energy industries overbuild. Distressed project sponsors seek more public money. Governments come to realize they can’t afford to continue the spending. They become finicky about handouts.

In the US, ethanol is in advanced stages of this cycle and has become largely unloved. The bankruptcy of solar-panel manufacturer Solyndra is much celebrated but hardly alone. Solar companies in Europe are failing as competition depresses prices of their products and financially imperiled governments trim subsidies.

Progress toward commercialization of lovable energy is altogether slight, if that.

The politically anchored lifecycle is regrettable not only because it wastes public money. It’s regrettable also because it makes renewable energy unlovable.

The lifecycle ends when costs and failures turn voters and investors away from renewable energy.

And that’s regrettable because the world needs the energy—or will.

(Online Dec. 22, 2011; author’s e-mail: [email protected])