While Romney and Tea Party Ramp up Hate for Renewables – Germany Blasts Ahead with Lower Costs and Surprising Benefits
October 9, 2012
Yesterday, the European Energy Exchange (AEX) released figures for September, revealing that the price of baseload power in Germany has fallen by nearly 0.8 cents per kilowatt-hour over the past year – and has been cheaper than baseload power in France for 12 consecutive months
he EEX published the trading results for September yesterday, but unfortunately the press release is currently only available in German. What it shows is that day-ahead prices in Germany & Austria are lower than in France or Switzerland both in terms of base load and peak load. Indeed, though the press release explains that prices on the German and French markets “converge 75% of the time” (during periods of low consumption, such as during the night and on weekends), the difference in prices has become considerable, with the difference in base load prices being 4% on the average for September.
And our colleagues at Photon magazine point out something in their German newsletter today (not in the English version) that the press release does not explicitly say – day-ahead prices have been lower in Germany than in France for 12 consecutive months. The average German baseload price in September was slightly below the price in August, so the downward pressure on prices continues. The drop over the past 12 months in Germany has indeed been quite dramatic at around 18% – from 5.264 cents per kilowatt-hour in September 2011 to the current 4.467 cents last month.The news is especially important because nuclear power, which provides slightly more than 75% of France’s power supply, is often held to be an especially inexpensive source of baseload power. Furthermore, opponents of renewables repeatedly voice their concern about the cost impact of green power scaring away industry. But in fact, industry by and large pays rates on the power exchange, which are determined by the most expensive power generator that needs to be ramped up to meet demand, not by the least expensive source. And over the past year in particular, the tremendous growth of photovoltaics in Germany has offset demand for more expensive peak power, thereby bringing down spot market prices.
By now, almost every claim and counter-claim from last night’s presidential debate has been picked apart. But there’s one assertion that has received minimal attention in the after-action coverage of the debate — and it was one of the most blatant lies of the night.
The comment came about two thirds of the way through the conversation. As Romney was riffing on funding education, he pivoted to his talking points on Obama’s support of renewable energy and let this whopper loose:
“And these [clean energy] businesses, many of them have gone out of business, I think about half of them, of the ones have been invested in, have gone out of business.”
The New York Times, one of the few mainstream organizations to follow up on this claim, called Romney’s comment a “gross overstatement.”
Actually, it’s much more offensive than that.
At a time when the U.S. clean energy industry is supporting thousands of innovative businesses in every state (many of them small businesses), hundreds of thousands of jobs (including tens of thousands in Romney’s home state of Massachusetts), and leveraging tens of billions in private capital, Romney casually tried to claim that “half” of businesses that received federal incentives have gone out of business. That’s not even remotely close to the truth.
Okay, let’s throw the Romney camp a bone. To the small number of people who actually monitor this topic, it was clear that he probably meant the loan guarantee program — a tool that provides government backing of private loans in order to leverage capital for “first of a kind” renewable energy projects
After numerous tweets last night calling Romney out, Time Magazine’s Michael Grunwald confirmed today via twitter that the campaign was backtracking: “Now Romney camp tells me he misspoke, only meant to single out loan program.”
So let’s narrow Romney’s statement down to the loan guarantee program. Are we getting closer to the truth? No.
The loan guarantee program Romney referenced supported dozens of companies. Of those companies, three recently went bankrupt due to difficult market conditions. But that’s out of 33 companies that received loan guarantees or commitments for loan guarantees. That translates to a 10 percent failure rate representing roughly 2 percent of budgeted funds for the program — a big difference from the 50 percent failure rate that Romney claimed.
In fact, an independent review of the loan guarantee program found that it will cost $2 billion lessthan actually budgeted for. (Yes, the program is designed to accept a certain level of failure, which is an important part of supporting innovative projects that need help accessing private capital).
Along with his false comments about bankruptcies, Romney claimed that Obama had “provided $90 billion in tax breaks to green energy” in one year. While $90 billion is an accurate number, it was certainly not all for tax breaks and it was not all deployed at once. (In fact, some of it still hasn’t been spent). The money was set aside through the stimulus package for grants, competitive prices, demonstration projects, and loan guarantees — with $3.4 billion going toward “clean coal,” a technology that Romney said “I like” during the debate.
The real problem with these claims isn’t how detached they are from reality. It’s that Romney likely wants them to be true.
If the clean energy industry really were suffering — not booming like it is — then he’d be able score politically. But polls show Americans still really, really like federal support of the sector and that messaging around the bankrupt solar company Solyndra isn’t sticking. So, why not claim that half of companies went bankrupt? That will get people’s attention, right?
When you’ve convinced yourself of something that’s not true, it’s very easy to make your false claims as grandiose as you like.
For a review of all claims on energy during the debate, check here.