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Green energy subsidies?!

Splashed all over the front page of the Record today is the headline "Power From the People" and a picture of David Suzuki. Apparently, the McGuinty covernment is going to subsidize green energy production by paying green energy providers above-market rates for their electricity.

Holy cow. First the Liberals promise a referendum on voting reform, and now this. It makes me wish I had voted for the guys. Clearly, we are approaching an election year.

There's a fantastic component to this initiative and a really lousy one.

First, the good news: by subsidizing renewable energy to the tune of 11 cents the government is (in essence) pouring money into R&D; for new cleaner energy technologies. Given the alternatives that we have now (nuclear with its multi-millenial externalities, hydro with its flooding, coal and oil with their greenhouse gasses) this is something that is sorely needed. I firmly believe that with enough human ingenuity we can solve this problem.

Is this messing with the markets? Yes. But already the government pours money into subsidizing other energy generation technologies (4.3 cent cap, anybody?). Energy is so fundamental to our well-being that it almost makes sense to do so. Just as with food production, there are really bad side-effects to this, but at least the government is doing no worse by subsidizing green energy than dinosaur power.

Furthermore, the government is doing something really worthwhile: it's developing the market for green technologies. Right now there is no way that green power technologies can compete in energy markets, because they are just not cheap enough. By opening up the market and providing these subsidies, the government is encouraging enterpreneurs to get into this field, compete with each other and develop cheaper and more effective green energy sources. This is exactly what markets are good for. The price of green energy will go down on its own, and the efficiency will go up, and the subsidies will become less and less necessary (whether future governments will have the political will to eliminate these subsidies in the future is another question, though). In my eyes this is no different than the government putting money into education, university research or any other long-term infrastructure: the long-term benefits far exceed the short-term costs. (This is one reason IMF structural adjustment programs have failed, I think.)

Fine. So I am excited about the subsidy. But then the fool government goes and screws it up: it increases the subsidy for solar power (which I assume means photovoltaics) from 11 cents per kilowatt hour to 41 or 42 cents. What a stupid, stupid move.

Here's the problem: photovoltaics are dumb. (Sorry, tbiedl.) They are expensive AND inefficient, and have been for the past three or four decades. So why should the government say that PV is worth four times as much as electricity from other green sources?

In fact, I think PV is the greatest enemy of green energy there is. On the surface photovoltaics look great: they last a long time and don't have ill effects: they don't chop up birds or flood native reserves or produce smog. So all the dumb hippie environmentalists push PV, and then regular people take a look. The regular people look at the facts and then conclude that maybe green energy is good in some fantastic Star Trek utopia, but that it is hopeless for meeting any meaningful fraction of our actual energy needs. Then they go build nuclear power plants instead.

The regular people are right in concluding that PV is horrible. But they are wrong in concluding that all green energy is similarly broken. Personally, I would be totally happy if we had a future where provided 20 or 50 or 100 percent of our energy sustainably (which could include hydro, I guess) and didn't have a single solar panel in the entire province.

The only way this extra subsidy could pay off is if the increased incentives led to the Big Breakthrough: we discover some way to make PV dramatically cheaper and/or more effective, so that it actually can compete against hydro and oil. I do think that improvements can and will be made to photovoltaics: a company named ATS (Automatic Tooling Systems, which laid off a bunch of people lately) developed a neat technology which embedded PV in flexible sheets, and I saw a neat textbook on Organic Photovoltaics in the local library. However, I question whether we are going to come up with the breakthrough that is going to make PV worth the enormous research costs. Meanwhile, we are diverting money to initiatives that could bear much more fruit, such as biodiesel or cogeneration or harnessing lightning bolts. Grrr.

Also we are a northern climate. We don't get all that much usable sun.

That doesn't mean I hate PV. If people want to go off and put panels on their roofs, that's fine by me. The payback time will be enormous and if we ever get the Big Breakthrough all those obsolete expensive panels will look silly, but that's no different than the investments people make in computer technology. BUT if people are going to play with PV they should foot the bill themselves. It's not the government's job to subsidize people's luxury consumption, and it's not the government's job to make PV cheap. It's the government's job to work towards long-term benefit for our population, and PV needn't be part of that picture.

So, yeah. Good news and bad news. I honestly do hope that the government sees the 11 cent subsidy through, and I hope they subsidize PV at 11 cents, and I hope that we do develop a strong diverse energy generation market. That is the kind of world in which I want to live. But let's not be dumb about it, please.

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