The Green Jobs Scam

“Green jobs” is the new vernacular of governments in the developed world. This is how it works. Government sets itself arbitrary goals to change the basis of energy use in a jurisdiction. For example, Britain has decided to commit itself to a policy of having 15% of its energy from renewable sources – wind, solar, water – by 2020. It then usually offers incentives – subsidy, tax relief (subsidy), matching funds (subsidy) – to rent seekers who will build wind or solar facilities and connect these to the grid. The grid has to be modified to become smart so as to accept these unreliable sources of energy, which creates more green jobs. Consumers are then given price guarantees, since green energy is more expensive than coal or gas powered energy, since it is less reliable and expensive to construct (especially to do so quickly). Prices are sometimes subsidized.

Britain wanted the private sector to act, but the recession plus a lack of interest from investors has made this difficult to do. In fact several, including Iberdrola Renewables and Shell, have pulled out of wind schemes, giving excessive import costs and an uncertain regulatory environment (lack of subsidy) as causes.
A part of the problem here is simple. In Britain, there is no wind power industry. Only 700 people work in the industry at present, while the UK is home to just one company that makes parts for wind turbines. So to go from basically nothing to a 70,000 person industry in six years is, well, silly. It can only happen if government pays.

Since most governments are pursuing this same strategy, wind turbine components are in short supply, making it more expensive to construct a wind farm than hitherto. This is especially the case for “offshore” wind farms – needed since no one want a wind farm in their back yard (and the wind is more reliable offshore than on).
So once again the private sector is being smart. It cannot see the upside of wind farms financially. If Governments want it they will have to pay for it, which means more debt and more taxes and fewer other government services to pay for the new grammar.

Ah well, back to the drawing board.