ENERGY II: by Joseph PoprzecznyNews Weekly
Renewable energy drive "economically counter-productive": Spanish study
, July 9, 2011
Contrary to what Greens and Gillard-led Labor politicians claim, wind and solar energy farms are significant job-killers.
This tragic and under-reported aspect of the so-called renewable energy crusade is outlined in a 52-page report by Spanish academics, entitled Study of the Effects on Employment of Public Aid to Renewable Energy Sources, published in March 2009 by the King Juan Carlos University, Madrid.
The report said that the European-wide craze to fund so-called “green jobs”, or renewable energy, had emerged around 1997, and it concluded that all the policies propping up uneconomic solar and wind-generated electricity had been “terribly economically counter-productive”.
It added: “The study’s results demonstrate how such ‘green jobs’ policy clearly hinders Spain’s way out of the current economic crisis.”
The researchers compiling the report found that for every renewable energy job the Spanish government had financed one could “expect a loss of at least 2.2 jobs on average, or about nine jobs lost for every four created, to which we have to add those jobs that non-subsidised investments with the same resources would have created”.
It continued: “Despite its hyper-aggressive (expensive and extensive) ‘green jobs’ policies, it appears that Spain … has created a surprisingly low number of jobs, two-thirds of which came in construction, fabrication and installation, one quarter in administrative positions, marketing and projects engineering, and just one out of 10 jobs has been created at the more permanent level of actual operation and maintenance of the renewable sources of electricity.
“This came at great financial cost as well as cost in terms of jobs destroyed elsewhere in the economy.
“The study calculates that since 2000 Spain spent €571,138 [AUD$819,000] to create each ‘green job’, including subsidies of more than €1 million [AUD$1.43 million] per wind industry job.
“The study calculates that the programs creating those jobs also resulted in the destruction of nearly 110,500 jobs elsewhere in the economy, or 2.2 jobs destroyed for every ‘green job’ created.
“Principally, the high cost of electricity affects costs of production and employment levels in metallurgy, non-metallic mining and food-processing, beverage and tobacco industries.
“Each ‘green’ megawatt installed destroys 5.28 jobs on average elsewhere in the economy: 8.99 by photo-voltaics, 4.27 by wind energy, 5.05 by mini-hydro.
“These costs do not appear to be unique to Spain’s approach but instead are largely inherent in schemes to promote renewable energy sources.
“The total over-cost — the amount paid over the cost that would result from buying the electricity generated by the renewable power plants at the market price — that has been incurred from 2000 to 2008 (adjusting by 4 per cent and calculating its net present value [NPV] in 2008), amounts to 7,918.54 million euros (approx. $US10 billion)….
“Spanish citizens must therefore cope with either an increase of electricity rates or increased taxes (and public deficit)….
“The high cost of electricity due to the green jobs policy tends to drive the relatively most electricity-intensive companies and industries away, seeking areas where costs are lower.”
Although wind and solar farms may look attractive and make Greens and Labor politicians such as Senator Bob Brown, Wayne Swan and Prime Minster Julia Gillard feel virtuous when dishing out taxpayers’ money, what is never acknowledged is these policies’ capacity to destroy jobs.
Before Mr Swan and Ms Gillard agreed to hand over the more than three quarters of a billion dollars to the Moree and Chinchilla ventures, they should have heeded the warnings of the King Juan Carlos University study.
Clearly, it appears this was not done.
If, however, they had done so, yet still persisted in handing over to private investors in these projects more than $750 million, then they stand even more condemned as wastrels and job-destroyers.
Let us hope that Coalition politicians put this extravagant government largesse under proper parliamentary scrutiny, including assessing its huge costs at the expense of Australian jobs.
Joseph Poprzeczny is a Perth-based political commentator.
Gabriel Calzada Alvarez, PhD, et al, Study of the Effects on Employment of Public Aid to Renewable Energy Sources, King Juan Carlos University, Madrid, March 2009.