Archive for category Energy
Colorado Needs Good Jobs…
Posted by Joshua Sharf in Colorado Politics, Energy, HD-6 2010 on May 18th, 2010
…not subsidized “green energy jobs.”
Colorado needs to take advantage of its 300 days of sunshine and its good locations for wind energy. But subsidizing these energies’ end markets – paying people to use them, or forcing electric companies to use them – is going to cost Colorado jobs in any number of ways.
Now, the model for President Obama’s Green Energy strategy, and for Governor Ritter’s “New Energy Economy” is admitting as much, privately (the original Spanish Government report is here).
In any industrialized economy, energy costs far outstrip labor costs, which makes employment much more vulnerable to increases in the price of electricity. And wind and solar are exceptionally expensive to produce. Which means that the jobs they create actually significantly reduce employment in those and other industries.
Colorado is lucky in its abundance of clean natural gas and clean coal. While continuing to help along the research end of solar and wind, we should make full use of our coal and natural gas resources, to get our economy back to full employment.
Electric Car Network
Posted by Joshua Sharf in Energy on February 16th, 2010
I wrote about car recharging stations being developed in Israel and being deployed there and in Denmark. Now, the company, which has secured a $350 million investment led by HSBC, plans to launch a network of charging stations in Israel by next year. They’ve partnered with a local gas station chain to host the recharging stations, and with Renault to modify their cars to take the electric batteries. Better Place claims that the batteries have a first-run life of 300-400,000 kilometers (that’s about 180-240,000 miles in real units), and then can be reconditioned to get that amount again on their second run.
New technologies often have the problem of being dependent on parallel developments to work. In the 1860s and 1870s, railroads weren’t going to build without a population to support; the people couldn’t get there without the railroads, so the government heavily subsidized western track-building. In this case, it was clear that the recharging stations wouldn’t work without cars to service, and it’s been clear to me for some time that electric cars weren’t going anywhere if they were only good for runs to the supermarket. Better Place has managed to broker the deals necessary to get the technology moving, and one assumes that Israel’s electrical grid is up to the task.
It’s unclear where the initial R&D funding came from, but the fact is that the market has supported the development of these grids and these cars. Agassi claims that the cars will be cheaper than the gas equivalents, and cheaper to “refill” per mile than the gas equivalent. Their range is advertised at 350 miles, which is about what an average tank of gas gets, and about 50 miles farther than my Jeep gets on one tank. Assuming that the car’s performance is adequate, the market already exists. It means that I don’t have to believe in anthropogenic global warming or peak oil or anything else to buy one. I just have to want to save money.
The question for the USA, as always, is where we’re going to get the electricity from. If individuals want to recharge their batteries, they’ll probably do so overnight, which means baseload capacity that wind and solar can’t provide. So hopefully, those of us who want to see both nuclear and electric cars can persuade both ends to make it easier for the middle.
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ttp://www.jsharf.com/view/?p=284
Electric Cars – Stop ‘n’ Swap
Posted by Joshua Sharf in Business, Energy on November 9th, 2009
It should be clear that the appropriate analogy to the filling station isn’t the recharging station, it’s the battery-swapping station, along the lines of a propane refill. Now, an Israeli is trying to make this work in Israel and in Denmark:
Better Place proposes building a network of curbside charging stations where owners can top off their vehicle batteries. Agassi’s idea generated $300 million in venture capital and sparked international interest: Cities in Israel and Denmark hope to have the first robotic change stations running in 2011, and the company aspires to expand operations to Australia, Canada, Hawaii and California in 2012. In late September, Better Place signed a deal with Renault-Nissan to put 100,000 electric vehicles on the road in Israel and Denmark by 2016.
I’ve always believed that the only way we’re going to get Americans into electric cars is to extend their range. Especially out west, where I live, it’s virtually impossible to imagine driving your car for 100 miles, and then stopping for a few hours to recharge. That might work for in-city commutes, but too many of us routinely make business or pleasure trips of well over 100 miles, and some even have commutes that long.
If this idea can work in high-density, short-trip areas like Israel and Europe, it ought to be able to substitute in Utah, Nevada, and Arizona. It’ll be interesting to see what kind of business model he comes up with. I’d suspect that franchising would be the fastest way to expand, with the quality control issue here being the quality of the battery, and making sure that the station owners weren’t under-charging the batteries.
As with any technology, this isn’t going to happen overnight. You’d still want batteries that could make it 300 miles or so, a typical tank of gas. The barriers to entry – read: capital investment – for swapping stations and cars alike remain high. And, of course, barring nuclear plants, massive numbers of electric cars are going to mean hot summers and cold winters for a lot of people.
But this is clearly the operational model that can work.
The Very Expensive “New Energy Economy”
Posted by Joshua Sharf in Budget, Colorado Politics, Economics, Energy, Taxes on November 3rd, 2009
There are times when one wonders whether or not the writers for the Denver Post actually read the Denver Post. Then, there are times when one wonders whether is would make any difference if the did.
On October 14, the Post carried an AP story noting that the new German government, a coalition between the Christian Democrats – Mark Steyn’s right of left of right of center party – and the Free Democrats, who actually permit themselves the luxury of promoting free markets now and again, would be cutting Germany’s legendary solar subsidies, which the country had maintained for about two decades. Apprently, subsidizing expensive energy doesn’t look so good during a recession, and Germany is willing to forego the expensive green jobs that such industry creates:
Investors expected Germany to cut back on solar subsidies this year as the recession sapped demand and tightened government budgets, said Benedict Pang, an analyst with Caris and Company in San Francisco.
“During the downturn, the wheels started to come off” in Germany, Pang said. “A lot of solar companies have weaned themselves off of that market.”
…
Germany has guaranteed renewable energy generators fixed payments for the power they produce to encourage the production of solar panels and several of the world’s leading producers of the technology are based here.
A week and a half later, Bloomberg reported that the Germans had done just that:
Chancellor Angela Merkel’s new junior partner in government, the pro-business Free Democrats, approved a four-year coalition program that points Germany toward tax cuts and a reprieve for nuclear energy….
Separately, the government will seek talks with solar-energy industry on possible “adjustments” to avoid “excessive subsidies,” according to the coalition draft.
So naturally, it was a source of much rejoicing when the German company, SMA, no longer able to make money on its home turf, shifted production to Colorado, bringing with it its prize of 300 jobs, at a cost of a mere $12,000/job to the Colorado taxpayer.
Now, that’s not as much as the colossal $240,000 per job – plus the added cost of the actual electricity – that Germany’s worked itself up to. And the so-called “green jobs” trap has been largely responsible for the depth and intractability of Spain’s contractiion during the global recession. Of course, they’re paying about $600,000 a job, so we’ve still got a ways to go to match that.
These jobs are incredibly expensive, as Colorado is about to find out, and apparently don’t survive the end of subsidies.
Let’s just hope that those interim committees take note of why Colorado beat out other US states:
[Colorado Office of Economic Development and International Trade's Pete] Roskop said other states were throwing more money for incentives at the company, but Colorado had lower costs for items such as corporate taxes and worker’s compensation insurance.
Then, there are the times when one wonders whether some people ever read the business pages at all.