More “Green” Energy Cronyism and Corporate Welfare
By David J. Theroux • Saturday November 12, 2011 4:10 PM PST •
The New York Times reports in “A Gold Rush of Subsidies in Clean Energy Search” that NRG Energy is receiving nearly $1.6 billion in government subsidies for its new compound in California of almost one million solar panels. The Times further notes that:
Similar subsidy packages have been given to 15 other solar- and wind-power electric plants since 2009.
The government support—which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates—largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come. The beneficiaries include financial firms like Goldman Sachs and Morgan Stanley, conglomerates like General Electric, utilities like Exelon and NRG—even Google. . . .
As NRG’s chief executive, David W. Crane, put it to Wall Street analysts early this year, the government’s largess was a once-in-a-generation opportunity, and “we intend to do as much of this business as we can get our hands on.” NRG, along with partners, ultimately secured $5.2 billion in federal loan guarantees plus hundreds of millions in other subsidies for four large solar projects.
“I have never seen anything that I have had to do in my 20 years in the power industry that involved less risk than these projects,” he said in a recent interview. “It is just filling the desert with panels.”
As the Times further notes:
“The private sector really has more skin in the game than the public realizes,” said Andy Katell, a spokesman for GE Energy Financial Services, which like Goldman Sachs, Morgan Stanley and other financial firms has large investments in several of these projects.
But there is no doubt that the deals are lucrative for the companies involved.
G.E., for example, lobbied Congress in 2009 to help expand the subsidy programs, and it now profits from every aspect of the boom in renewable-power plant construction.
It is also an investor in one solar and one wind project that have secured about $2 billion in federal loan guarantees and expects to collect nearly $1 billion in Treasury grants. The company has also won hundreds of millions of dollars in contracts to sell its turbines to wind plants built with public subsidies.
For a refutation of “green” and any form of corporate welfare and neo-mercantilism, please see the following:
Financing Failure: A Century of Bailouts, by Vern McKinley
Beyond Politics: The Roots of Government Failure, By Randy T. Simmons
Re-Thinking Green: Alternatives to Environmental Bureaucracy, edited by Robert Higgs and Carl P. Close