The cost of Al Gore’s renewable energy plan
Earth Day is a great day for politicians to push their clean energy agenda and President Obama made this clear when he reiterated in Earth Day video message that we need to transition to a clean energy economy. Politicians say that we should use the earth’s renewable resources, most notably the wind and the sun, to power our country. Some Members of Congress are even pushing for a federal mandate that requires a predetermined percentage of our nation’s electricity from certain energy sources. The champion of ideas, as always, is Al Gore, who believes we can supply all our energy with renewable energy. But the reality is if we pursued Al Gore’s renewable energy dream, it would be American electricity consumers’ worst nightmare.
Former vice president Al Gore has a man-on-the-moon type mission for America’s energy future. In July of 2008 he called for the United States to commit to having 100 percent renewable energy power our nation—in just 10 years. That means all of the country’s electricity would be supplied by renewable energy by 2018. (Excluding hydro, renewables generated 3 percent in 2008) In his speech Gore said,
—“I challenge our nation to commit to producing 100 percent of our electricity from renewable energy and truly clean carbon-free sources within 10 years. To those who say 10 years is not enough time, I respectfully ask them to consider what the world’s scientists are telling us about the risks we face if we don’t act in 10 years. The leading experts predict that we have less than 10 years to make dramatic changes in our global warming pollution lest we lose our ability to ever recover from this environmental crisis.”
Leaving the point about the environmental crisis alone for now, what would Al Gore’s plan cost Americans? Heritage Research Fellow David Kreutzer crunched the numbers and found that to meet Al Gore’s plan, with the cheapest renewable energy source, onshore wind, a family of four’s electricity bill would be almost double than if it were supplied by all coal—up from $189 a month to $340 a month. He assured Americans that we can use wind, solar and geothermal to power America. But the price only increases. Offshore wind: $404 a month. Solar thermal: $504 a month and worst of all, solar panels: $718 a month. That’s only $8,600 per family per year to cover our earth with solar panels. These calculations use data from the U.S. Energy Information Agency and while few policymakers suggest we pursue Al Gore’s 100 percent dream, it should serve as a wake-up call that the wind and the sun aren’t free sources of energy.
Wind Sells…But Who’s Buying?
Last year, President Obama allocated $3.4 billion in stimulus funds for smart grid investments before a crowd at a solar power plant in Florida on an ironically cloudy day. This raises the question: Who’s getting our taxpayer dollars? Silver Spring Networks for one—a company that makes hardware and software to improve efficiency in the nation’s electricity grid that Al Gore’s venture capital firm just so happened to invest in. The New York Times’ John Broder reports, “Of the total, more than $560 million went to utilities with which Silver Spring has contracts. Kleiner Perkins and its partners, including Mr. Gore, could recoup their investment many times over in coming years.” Broder calls Silver Spring “a foot soldier in the global green energy revolution Mr. Gore hopes to lead.”
The problem with Al Gore’s twisted version of capitalism is that he and other green investors get rich only when regulations cause consumers’ energy bills to skyrocket. If Al Gore wants to invest his money in green technology, he can do as he pleases. The taxpayer does not have such autonomy. Along with Gore’s investments, the government is taking other people’s money to invest in these projects who do not have a say in the matter—what economist Frederic Bastiat calls legalized theft: “See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.” Of course the reason renewable energy needs a government crutch is because they can’t compete in the market otherwise.
With cap-and-trade, a mandated renewable electricity standard, and billions of dollars in taxpayer-funded green energy investments, it’s no surprise “few have put as much money behind their advocacy as Mr. Gore and are as well positioned to profit from this green transformation, if and when it comes.” But it’s not just Gore. Large energy companies are hedging their bets on political policies designed to make renewable energy more competitive with taxpayer support. The name of the game is special interest politicking in Washington. Few win at the expense of many.
Gore likened his mission to Kennedy’s call to put a man on the moon in a decade, but it’s Gore who needs to come down to Earth.
Nicolas Loris is a Researcher at The Heritage Foundation’s Roe Institute for Economic Policy Studies.