Surprise, surprise. Subsidies were not enough to make Biden’s energy projects profitable. 
The Coming Green Energy Bailout
Taxpayers will soon be on the hook for The Coming Green Energy Bailout
The Inflation Reduction Act (IRA) includes hundreds of billions of dollars in subsidies for green energy, yet now renewable developers want utility rate-payers in New York and other states to bail them out.
According to a report late last month by the New York State Energy Research and Development Authority (Nyserda), large offshore wind developers are asking for an average 48% price adjustment in their contracts to cover rising costs. The Alliance for Clean Energy NY is also requesting an average 64% price increase on 86 solar and wind projects.
The IRA includes federal tax credits that can offset 50% of a project’s costs. But renewable developers say their costs are increasing faster than inflation and that the projects will “not be economically viable and would be unable to proceed to construction and operation under their existing pricing,” says Nyserda.
Irony alert: One reason is that the government-forced green energy transition is driving up demand for equipment, material and labor. “Growing demand for renewable energy projects nationwide ‘has exacerbated inflation for renewable project cost components relative to broader inflation levels,’” Nyserda says, citing the Alliance for Clean Energy NY.
The climate lobby says power from wind and solar is cheaper than from fossil fuels, but that’s true only with generous subsidies and near-zero interest rates. Price adjustments that renewable developers want in New York would make solar and wind two- to five-times more expensive than natural gas power.
Another irony: The IRA’s prevailing wage and domestic content conditions for bonus tax credits, which are necessary to make projects viable, inflate costs. That means U.S. taxpayers will pay more for the green corporate welfare, and utility ratepayers will pay more for renewable power. The climate lobby hits you coming and going.
Meantime, the computer chip maker Micron Technology recently disclosed that its planned factories in upstate New York, which are set to receive up to $5.5 billion in state subsidies, will consume as much power as New Hampshire and Vermont combined. Where will all the power come from?
What a hoot.
The speed at which these projects blew up seems stunning. But it really isn’t.
EVs, solar, and wind projects don’t scale. Heck, they don’t scale even with subsidies. I have been saying this for months.
Needed minerals and and skilled labor are in short supply. The US is still dependent on China and other foreign countries for materials.
Biden has escalated trade wars with China, but China hasn’t even retaliated much yet. It can with rare earth elements.
Everything Biden does leads to more inflation.
Electric Vehicles for Everyone?
On July 19, I asked Electric Vehicles for Everyone? If the Dream Was Met, Would it Help the Environment?
My follow-up post was What Do MishTalk Readers Think About “Electric Vehicles for Everyone?”
Math Does Not Add Up
The EV math does not add up in the EU or here. But here we go anyway.
The Shocking Truth About Biden’s Proposed Energy Fuel Standards
In case you missed it, please consider The Shocking Truth About Biden’s Proposed Energy Fuel Standards
The National Highway Traffic Safety Administration NHTSA did an impact assessment of 4 fuel standard proposals and compared them to the cost of doing nothing. Guess what.
The NHTSA conclude: “Net benefits [of stricter mile standards] for passenger cars remain negative across alternatives” vs doing nothing at all.
See the above link for details and charts.
“EVs, solar, and wind projects don’t scale. Heck, they don’t scale even with subsidies. I have been saying this for months.”
Then you’ve been wrong for months, unless you’re smarter than the guys at Lazard who do the levelized cost of energy studies every year. Looks to me like large scale wind/solar are both cheaper on a levelized basis before subsidies.
The tragedy isn’t that a few developers here and there got caught underpricing their PPA’s (purchased power agreements) and not fixing their costs. The tragedy is that subsidies were/are being given out when they are no longer really required.
Reminds me of a phrase we use when evaluating new projects:
“In your dreams!”
“That means U.S. taxpayers will pay more for the green corporate welfare, and utility ratepayers will pay more for renewable power. The climate lobby hits you coming and going.”
The so-called “climate lobby” would be best called “survival lobby”. As in, do you like eating? A warm home? Electricity? If you do, then you pay the piper whatever the piper demands.
Now, it just happens that you’ve been believing certain priests that call themselves “finance experts”. They think that dollars are something that exists like food exists, or temperature exists, or electricity exists. I have news for you: dollars exist in a more ethereal plane of existence. In other words, they tend to disappear in a puff when things like food, temperature or electricity start asserting themselves. If those “finance experts” really understood money, they would have mentioned that to you.
Actually, maybe they did when they talked about this thing called “inelastic demand”. They might have failed to point out exactly how much like a brick wall is this “inelastic demand”. There is an inelastic demand from people who may not have listened much to those finance experts/priests that promised you heaven as long as you forgot that most economic instruments don’t really mean anything at all when the chips are down, and people will believe the economic ideas of whoever can provide them with reliable food, heat, and electricity.
Every major energy construction project goes way over budget. Look at any recent nuclear power plant build. If it only went 2x over budget, it was a well managed project. Seeing as how offshore wind is probably the most expensive energy to construct, their costs seem remarkably low to me.
Anything offshore is at least 10 times more expensive to maintain then on shore. Offshore oil production needs huge reservoirs to make it a paying proposition.
Obama 3.0 is having Solyndra Infinity results.
The answer to the problem is bicycle pedals as an assist in every Tesla, and a liposuction belt in every ICE vehicle that sucks that fat right into the fuel ejectors.
Ford and GM were fully committed to EV. They might welcome a strike to cover
their mgt mistakes. They will blame UAW for their demise.
CNQ 1M : CNQ is backing up > 2008 high @ 53.93 for a year and a half. funfunfun options :
1) Accumulation. CNQ is breaking out > Apr 2022 high to a new all time high.
2) CNQ will close the June 9/10 gap and turn down.
3) CNQ will test a downtrend line L1 coming from 2008 to 2011 highs.
4) In a deep recession CNQ will breach L1 to the 20/25 area, a higher low above Oct 2020 low.
5) CNQ
Duh!
The whole purpose of any of it, was never anything other than transferring even more of what little is left of wealth created by America’s rapidly dwindling number of productives; to dilettante “investors”, who “invested” in lobbying for Biden.
And then, when Trump wins, the transfers will be directed to dilettante “investors” who “invested” in lobbying for Trump.
Who, conveninetly, are exactly the same people.
“The Coming Green Energy Bailout”
In his weekly market Youtube, Maverick of Wall Street put a check mark next to stagflation, after weeks of weighing various factors.
Does this fall under the CHIP act or some other act?
The troubling part of all this inflationary spending is that the US provides government subsidies, sites and construction labor (although apparently lacking even there), while mostly Asian suppliers provide the technology.
Lucky while you can print dollars to pay for it.
“EVs, solar, and wind projects don’t scale. Heck, they don’t scale even with subsidies. I have been saying this for months”
100% correct, EV, solar and wind can only advance and maintain with subsidies. Once subsidies stop they end.
“Net-zero is crumbling under the weight of its own inconsistencies. All that the government, alongside the politicians, can do is recognise the inevitability of failure. Those businesses which have been foolhardy enough to have invested in this mad project will take the hit, and we will all have to pay.
The dream is over. The nightmare stage is about to begin.” (Richard North, Turbulent Times)
From my perspective the author is correct and Europe is now entering a pivot point. The US seems to want to enter and experience Net Zero crumbling under the weight of its owns inconsistencies.
Meanwhile an interesting report by Mark Mills
link to manhattan.institute
“Replacing hydrocarbons with green machines under current plans—never mind aspirations for far greater expansion—will vastly increase the mining of various critical minerals around the world. For example, a single electric car battery weighing 1,000 pounds requires extracting and processing some 500,000 pounds of materials. Averaged over a battery’s life, each mile of driving an electric car “consumes” five pounds of earth. Using an internal combustion engine consumes about 0.2 pounds of liquids per mile.”
Not to mention that oil and gas is an In-situ extraction rather than strip mining and child labor………robbing children of their youth when they should be in school.
Barrons a few issues back also had an article detailing the same data. The green energy EV revolution/ mandates are going to turn out to be the largest malinvestment in human history.
Didnt they also backstop the ObamaCare laws. Such that if an insurnace company fails to make a profit in one of the insurance exchanges then they can file a claim with the FEDs to get paid for all losses…
Placing a windmill on a patch of rocky or swampy unusable land in a farm is probably a decent investment whereas placement in an expensive offshore installation would be a loser. Same as with solar panels on the roof of a grocery store to offset refrigeration and lighting energy usage compared with a solar farm located in the desert at some distance from where the energy is needed. Electric vehicles are an excellent choice for short local commutes but not good long trips. The key is to remove politics from these engineering decisions.
I’m curious about this statement and the original context. I find it extremely difficult to believe that this can be true. These two states use a LOT of power, and for a few chip factories to consume more than both states combined? That is incredible.
“the computer chip maker Micron Technology recently disclosed that its planned factories in upstate New York, which are set to receive up to $5.5 billion in state subsidies, will consume as much power as New Hampshire and Vermont combined. Where will all the power come from?”
There is always a data set to validate information. Keep in mind that the population of NH and Vermont are fairly low.
link to eia.gov
Statements are from the Wall Street Journal. I provided a free link to the article.
I do not know where the WSJ got those lines.
Mish,
Any progress on putting in an ignore button? RoadRunner12 is spouting abusive nonsense and insulting you, I’d like to ignore the rest of the comments this clown posts. We also need a “report abuse” button.
link to mishtalk.com
“Any progress on putting in an ignore button? RoadRunner12 is spouting abusive nonsense and insulting you, I’d like to ignore the rest of the comments this clown posts”
No one comes close to spouting abusive nonsense and insults to the readers of this more than you. You treat this board like a stock bullboard with your multiple aliases and drown out anyone that doesnt agree with you viewpt.
Meanwhile this is a simple question, Realist, when you were spouting non-stop in the 5 monthish July 22 period when oil was >100 , oils not going below $100, buy oil, got oil, where are the capital gains? On the bright side, they wouldnt have lost their shirt as much had they listened to you to buy Plug Power, Ballard Power, etc.
I am not realist or anyone else, I don’t have any aliases here other than MPO and MPO45v2 (because the old system required email verification and I got locked out) and I don’t know what the hell you are talking about with Plug Power or Ballard power.
You exhibit the tell-tale signs of someone that has suffered a great deal of abuse and you come here to lash out at people. Get some psychological help, you need it.
What do you think oil would’ve done had there not been an spr release?
Toot toot!
The cost of climate change will be much higher than the cost of subsidies for green energy.
Plug Power is a great company. Wait and see!
Hydro-Quebec powers much of the northeast.
some who knows what he is talking about. Hydro Quebec has been producing green energy for years.
Definitely one of the greatest projects Quebec ever undertook.
Ironically, they sell so much power to the US and elsewhere that there is now a shortage in Quebec since most of what they generate is already spoken for.
Your government at work — for you!
Votre gouvernement à l’œuvre — pour vous!
“Hydro-Quebec powers much of the northeast.”
Ive posted this before. Quebec has now put itself in a pickle. Going forward with the net-zero green agenda now puts itself in the position that it wont have enough electricity for itself.
Interesting to see how this plays out.
link to financialpost.com
“The region that produces North America’s cheapest power faces a threat that seemed impossible just a few years ago — running short of electricity.”
“Quebec spent years working to convince U.S. states to buy its abundant clean energy, only to realize now that it won’t be able to produce enough electricity by harnessing the flow of moving water. That creates a conundrum for the province: build more dams that could reshape pristine rivers and slash swaths of forests — an environmentally damaging process that would boost hydropower supply — or temper economic policies that pin its prosperity on the resource.”
Never underestimate the stupidity and mendacity of politicians.
Certainly not Ontario Hydro. The name is a misnomer: it produces more than half of electricity from nuclear, and not cheaply from what I’ve heard.
So there you go nuclear power fans.
Quebec Hydro can only export electricity because of rather low population of the province and Canada as a whole. Now the cretins in charge will take that away by increasing the population by leaps and bounds.
This seemed preposterous to me too so I tried to look it up. It seems like it is true the plant will use more electricity than either Vermont or New Hampshire individually, but not combined. Incredible.
Any scientist worth his salt will freely admit that “the science” does not support the hysterical narrative being put out to scare people into stupid actions. Science is inherently skeptical and constantly looking for alternative hypotheses to better explain measured data. The fact that the earth is in a warming cycle is obvious. The cause is in question. There are many factors, the largest being natural. The extent to which man is effecting the weather is debatable.
The fact that CO2 is a plant nutrient and is actually greening the earth is also fact.
Climate change is not an existential threat. Political pomposity is!
Toot toot!
Why waste our time with your childish “toot toot” comments? If you have something meaningful to add, by all means do so. But the toot toot comments are infantile and contribute mothing.
It’s the KookWhistle. It goes off when a kooky statement is made.
There are quite a few today.
Toot toot!
This is a pile of plant nutrient.
That was a better response, but you can do still better.
Exactly! If climate change means there’s a great dying off of mankind in the next 50-100 years, then so be it. I won’t be around for it. It’s probably going to happen anyway from either a nuclear MAD moment or a Wuhan v2.0 super virus that combines SARS (uber transmissible) with MERS (uber deadly). Something like this could easily top 30% IFR (infection fatality rate).
Rate hikes will not stop inflation. Inflation is the policy being pursued by the federal government. Higher energy prices will reduce growth. Welcome to Stagflation.
Not at 50%? Not at 1000%
There is no upward bound, and if credit freezes, there will be deflation.
I can only hope then that hell freezes over as does credit.
We need a good old fashion GR v2.0.
Except this time, let’s make sure housing drops more than 26%. I like the sound of 40%.
People, high mortgage rates are less than 50% of the problem. About 70-80% of the problem with housing is extremely high prices that need a ton of foreclosures to revert to the mean.
Anything less is a pig in a poke.
And the alternative, oil, is at $85 and spiked to $90 so more inflation to come either way. Saudi announced 1m barrel cuts thru December. More rate hikes?
Actually the alternative is natural gas which the US has in spades so it doesn’t matter what the price of oil is.
But the Saudi and Russian cuts are going to send the price of oil up up and away. More profits for Papa Dave and everyone else who is heavy into the energy sector.
Oil makes up 0.6% of electricity generation. It’s not an alternative.
These guys aren’t lining up to fill up with natural gas.
link to youtube.com
Meanwhile Brandon continues to deplete the strategic petroleum reserve. I guess he is getting it down to zero so that the Navy will be stuck in port when his buddy Xi invades Taiwan. Wonder if he will get 10% of Taiwan?
Toot toot!
“I guess he is getting it down to zero so that the Navy will be stuck in port when his buddy Xi invades Taiwan.”
If only…
The US Navy, should they exist at all, should defend the US. That’s it. As cheaply as possible, hence as narrowly defined as possible.
If anyone else wants defending, they should arm themselves.
They claim there is enough natural gas to last “100 years” at “current consumption rates”. There are 2 problems with that statement: The amount that is economically recoverable is as inflated as a Trump real estate project, and “current consumption” doubles with a timeframe shorter than 100 years (it’s closer to 20-30). The actual amount of natural gas we have is closer to 30 years worth, which means natural gas will be in a crisis shortage in most of our lifetimes. And meanwhile we plan to replace Russia as Europe’s primary supply. It doesn’t add up.
That is why they are drilling shale gas. There isn’t anything else substantial left. And shale gas is hard.
” The actual amount of natural gas we have is closer to 30 years worth, which means natural gas will be in a crisis shortage in most of our lifetimes.”
Ive mentioned this a few times already but a cold winter will devastate Europe, Americans will also face a substantial increase in gas prices should this happen. Natural gas was generally a landlocked commodity but the push for the benefit of profits of some (LNG) will increase the cost to American consumers.
I fully agree with your thesis that the US will experience a crisis sooner rather than later.
Look around. We are experiencing a crisis right now in many areas, including a crisis of common sense. Anyone who doesn’t realize it (or won’t admit it) is foolish.
“Actually the alternative is natural gas which the US has in spades so it doesn’t matter what the price of oil is.”
The US temporarily has natural gas in spades. It will also hit a wall. A cold winter will hit Europe hard but there is also a rebound effect for the US. There is a price to pay for US increasing natural gas exports to the consumers of America.
1. IMO the US within 10 years will cease energy exports.
TexasTim, you seem to be capable of critical thinking, remember when Realist (papafraud, mpos, imgreenscam, jeffgreenscam, etc) was touting buy oil, Got oil, its not going below $100 ever again, think his call was for $120/$130 oil in 2023, in the period when oil was above $100 previous to 5 monthish pre July 22 period. ANYONE who listened to realist to buy high has no capital gains to this date.
I can only remember 2 of Realists renewable stocks that he said to buy when they were at the high, Plug Power and Ballard Power and he lost his shirt on those.
In late 2021 he said he expected oil to average 80 in 2022, 90 in 2023 and 100 in 2024. At that time he did not know there would be a spr release.
I think you are correct radar. Good memory!
“In late 2021 he said he expected oil to average 80 in 2022, 90 in 2023 and 100 in 2024. At that time he did not know there would be a spr release.”
Very odd, in 2022, he was saying oil would never go below $100???
And now to further corroborate Realist story, your making up for him that he did not know there would be a SPR release.
Funny you fail to recollect him saying incessantly saying oils not going below $100, Buy oil Got oil.
Meanwhile the fraudsters out of the country but yet all he does is read Mish blog all day, thats what I do to when Im out of the country. (sarcasm)
Like I said the fraudster plays this like a yahoo stock bullboard.
This is exactly what he said – “Over the next year we will get most of those supply releases. And they will get used up by increasing demand. My forecast is for $80 average prices next
year as this plays out. I still expect a supply crunch to happen late next year, when we hit the wall and oil goes back over $100. Due to initial demand
destruction from over $100 oil, I expect prices to drop back and average $90 in 2023 and $100 in 2024. The upward pressure will continue because of the
reluctance of oil companies to rapidly expand E&D and the time frames involved in bringing on new production.”
Hey roadrunner. Whatever Realist said to you to make you carry this grudge around for years; its time to let it go.
Realist isn’t here anymore. So you are venting at the wrong people.
I am not Realist. Maybe I wish I was, as I thought he was pretty amazing; but I am not Realist. I just picked up on his energy strategy.
I am also not mpo or jeffgreen. So please stop bothering them with this nonsense.
And I don’t even know who imgreen is.
If you need someone to beat up on, then go ahead and pretend that I am Realist. But leave the other guys alone.
You are just embarrassing yourself. Worse, no one understands what you are saying because you appear to be mixing up the comments of multiple people with different interests. It all comes out as a bunch of nonsense.
For example: Look at your “past recollections” of what Realist said about oil prices. Totally off base. I believe Radar has it right. But you are so bent on this vendetta, you are making crap up in addition to mixing up what people say.
How about some stock recommendations from you instead? If they work out, I will praise you, just like I praise the guy you hate so much,
You can’t reason with a kook.
“How about some stock recommendations from you instead? If they work out, I will praise you, just like I praise the guy you hate so much,”
Realist, I told you 4ish years ago, Im a gold bug and also told you my holding silver and silver coins and you laughed at me. Gold is at or near all-time highs in all currencies outside the US. Gold is up roughly $1000/ounce in Cdn dollars in that time span yet I dont go on like a bumbling idiot every day. Choo, Choo, Choo, look at me Im in 1st class while all you other steerage idiots can bite me. And besides Ive been around too long to believe some bumbling idiot who claims to be making millions every day.
Any praise coming my way for that? You continue to hate on gold and anyone that holds it. IMO, gold will begin its ascent in US dollars as time plays out.
Ive already said I like oil but unlike you who was suggesting to buy when it was high, I was suggesting maybe taking profits & that an opportunity may come for patient investors. Anyone who bought during the pre July 2022 at the highs are lacking capital gains to the present.
As for anyone interested in oil, these are not recommendations but I do favor Cdn oil & gas stocks. The author has compiled a list & preview of Cdn stocks that may be of interest to some.
link to whitetundra.ca
scroll down to Files and Latest Seminars and click on Canadian O&G Q3 preview.
Hey roadrunner. That’s better. I have also provided links to Shubham’s website and youtube videos as well. He does a great job. Though he himself is into the more speculative plays. While I am into the mid and large caps.
Though, not too many folks are interested in 3-5 hour presentations. I have watched quite a few of them. Very informative.
I’m personally not invested in oil and gas. I missed the boat on it in 2019 when the big money was there to be made. Most of my investments remain in health care where they’ve been ever since Obama care came in and it was clear between that and boomer demographics that long term all those companies were going to make big money. It’s worked out well overall but not so good in the last year.
To be honest, I’m surprised the US exports any energy at all given it’s technically a net importer (imports 10 million barrels a day in oil even with the boost from shale). I guess the gas exports net out the oil imports.
Eventually the gas will run down. Not sure if it will be in 30 years or 100 years or some other number. I think it’s going to be hard to figure out what’s recoverable because the higher the price the more that can be recovered and historically no one really cared much about the gas because it was oil that was in demand.
I am a big believer in healthcare as an idea. I am huge in an illiquid private placement that I cannot discuss.
TexasTim, hopefully your health stocks work out good for you. I only hold one, Pfizer which is a long term hold. Yes, its down over the last bit but has done well over the long term.
95% chance of Sept pass, but November is looking pretty good at this point. If the labor market holds up through the end of the year, inflation will continue to rise, making a 6% FFR very likely. Would love to see go higher, but who knows?
$2T federal deficits along with these two things pushed out a recession indefinitely:
1) New home prices are rising (seasonally adjusted of course) and may very well continue to do so through at least the end of the year.
2) Illegal immigration is creating significant rent, food & job demand.
It’s hilarious that no economist / analyst / guru wants to point out the inflationary pressure that illegal immigration is causing due to the political correctness nowadays.
I’ve been wondering where the 6 million new illegals went? Where do they live? How do they eat, get groceries, transportation, medical care? Do they have a plan? I’m sure the thousands of Chinese invaders have a plan when the order comes down.
By the time Biden is hopefully thrown out of office, the number will be at least 10M.
That’s a sh!t ton of new demand in the US for all sorts of things. In addition to housing, food, cars, gasoline, etc, there’s healthcare. And, illegals go to emergency rooms, the most expensive form of healthcare known to mankind.
And they don’t pay. It’s like all of these idiot dems gleefully allowing flash mobs to get away with enormous theft & property damage. What does that do to inflation? It sure as hell doesn’t lower prices. Providing emergency room healthcare to illegal immigrants is like theft. And the cost associated with crazy amounts of drugs coming into the country is nearly incalculable.
It’s great to finally see people in sanctuary cities like NYC finally coming to terms with what all this BS means. Again, love him or hate him, we wouldn’t be having these problems if Trump were still president. And Russia wouldn’t have invaded Ukraine.
Anyone who voted for Biden the first time and still plans to vote for the guy again needs to have their brain checked. It’s just absolutely mind boggling how bad Biden has made things in terms of inflation, foreign policy, & safety for American’s here at home.
The mere fact that NOBADY’S head rolled from the Afghanistan withdrawal just speak volumes of how bad of a President Biden is. Forget inflation, Ukraine, divisiveness, the fact he’s so senile, then judge him solely on Afghanistan. History will judge him extremely unkindly.
If folks don’t elect Biden next year it will take longer for America to crash and burn.
What else is new: ALL LIES, all the time, from BidenCo.
Nuclear energy is the only proven path to zero emissions energy. Look at France vs Germany.
If nuclear energy was subsidized and given preferential regulations like wind and solar, it would also be much faster and cheaper.
As for waste 1) there isn’t actually enough to make a fuss about, 2) long-lived waste by definition is low radioactivity – the whole trope about thousands of years of waste is just theater – don’t eat the waste and you’ll be fine, 3) we only make a fuss because it is concentrated – coal ash contains more radiation but it is diffuse so it gets a pass – solar panel waste is a much larger risk to health and environment but it is chemical instead of radiation so it gets a pass.
Carter screwed the nuclear energy sector when he outlawed reprocessing. All of the waste could have been recommissioned years ago into a near endless cycle.
You’ll know America is serious about nuclear, when Congress repeals that law, under a republican president, of course.
My bet is that Helion doesn’t miss its 2028 target by much to start selling fusion-based electricity to Microsoft. Helion is the company that could turn the energy sector on its head in the next 10 years or so. It will be hilarious to see them succeed while ITER goes down in flames.