Anyone following the news might be confused by recent talk of offshore wind projects in trouble, automakers pulling back on EV production, and now multi-billion-dollar bailouts for the green-energy industry. How could that be, since President Joe Biden and his fellow Democrats rammed through $370 billion in “clean” energy subsidies a little more than a year ago?
When Biden signed the criminally misnamed “Inflation Reduction Act” in August 2022, he boasted that it was “the most aggressive action ever — ever, ever, ever — in confronting the climate crisis and strengthening our economic — our energy security.”
So-called green-energy companies, not surprisingly, were ecstatic.
“Americans can now rest assured that our leaders have acted to lower costs, strengthen American energy independence, and create hundreds of thousands of well-paid jobs, all while combatting the damaging impacts of climate change,” George Hershman, CEO of SOLV Energy, a solar developer, said at the time.
Has anyone checked up on those promises recently? Well, let’s see:
Lower costs? Electricity prices are up 3% since Biden signed that bill into law, and up 24% since he took office. Overall energy prices are unchanged compared with August 2022 and are up 44% since January 2021.
Well-paid jobs? According to the White House, “between January 2021 and March 2023, the economy added 11,000 jobs in electric power transmission and distribution, 8,000 jobs in solar power generation, 2,000 jobs in wind power, and 1,000 jobs in hydroelectric power.”
We’re not math geniuses, but that doesn’t seem to add up to “hundreds of thousands” of new jobs.
Average wages are down in real terms, which wouldn’t be the case if the Inflation Reduction Action actually created lots of “well-paid jobs” either.
Combatting climate change? Worldwide carbon emissions are expected to hit a new record this year. Whatever your views are about the connection between industrial CO2 emissions and global warming, Biden’s “investment” is having no effect on the climate picture.
And now there’s news that the “green energy” economy is sputtering.
General Electric now expects to burn up $1 billion this year and again next year because of its offshore wind project losses, according to Bloomberg.
Fortune magazine reports that “Siemens Energy shares fall 40% after company seeks government help as wind-turbine woes threaten gas and power division.”
Danish wind energy company Orsted A/S announced it is writing off $4 billion after canceling two major offshore wind projects off the New Jersey coast — Ocean Wind 1 and 2. The company’s CEO said it was “to de-risk the most painful part of our portfolio, and that is the U.S.” (Orsted was in line for an estimated $1 billion in taxpayer-funded subsidies.)
In September, offshore wind farm developers begged New York’s Public Service Commission to increase contractual payments by an average of 48% to cover their costs — costs that would show up in higher utility bills. In a rare instance of common sense, the commission rejected this appeal.
“Everyone should prepare themselves to see an effort in Washington, D.C., to allocate billions more dollars to bail out Big Offshore Wind developers soon,” wrote David Blackmon, an energy analyst.
Solar energy isn’t doing much better. As Bloomberg reports, “rooftop solar in the U..S has been pressured by rising interest rates that make it more expensive for consumers to borrow for the up-front investment. Inverter makers Enphase Energy Inc. and SolarEdge Technology Inc. posted disappointing third-quarter results.”
Last week, SunPower Corp reported a third-quarter FY23 revenue decline of 9.3% year-on-year. Its stock, which was priced at $24 per share last November, is now trading at below $5.
Meanwhile, automakers are waking up to realize that, even with massive taxpayer subsidies, they are losing billions on EVs that are still too expensive to own and operate. As a result, they are now furiously dialing back their investment in EV production.
As Fortune reports, “carmakers are struggling to make electric vehicles affordable for pinched consumers — and rethinking their investments amid sagging demand.”
Tesla had to slash prices to keep sales from collapsing, and Elon Musk said he could delay a new $1 billion plant in Mexico.
GM pushed back plans to expand its electric pickup truck production at a plant in suburban Detroit. Ford delayed $12 billion of its planned $15 billion in EV-related investments, and it’s cutting production of its Mustang Mach-E. The company also postponed its second battery plant in Kentucky. Honda dropped plans to manufacture low-cost electric vehicles with GM. Toyota cut its EV sales forecast by nearly 40%.
And how about Biden’s plans for a massive network of charging stations? The pace of construction of new charging ports has actually slowed since Biden signed the Inflation Reduction Act into law. Between August 2021 and August 2022, the number of ports climbed by 20,000. Since then, just 10,000 have been added, according to data from the Energy Information Administration.
“The U.S. has made $2.5 billion available for private companies who want to build charging networks with the intention of getting chargers placed every 50 miles on major corridors,” writes Jalopnik’s Rory Carroll. “But the charging network money hasn’t yet resulted in a viable charging network and because it’s the work of Democrats, the incentive program is limited and too f***ing complicated to be useful.”
We suspect that’s true of all the other spending programs Democrats stuffed into the Inflation Reduction Act.
— Written by the I&I Editorial Board