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Failing “Green” Industry May Need Indefinite Subsidies to Survive

Posted on Tuesday, March 19, 2024
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by Ben Solis
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38 Comments
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AMAC EXCLUSIVE

green energy; wind turbines

For years, Democrats and other Western liberals have poured hundreds of billions of dollars into subsidies for so-called “green energy” under the assumption that those companies would eventually become profitable enough to stand on their own. But with revenues remaining stagnant or decreasing, it appears the left’s dreams for a “green revolution” may rely on permanent taxpayer handouts.

The latest indication that green energy is far from becoming economically viable came from Norway, where Shell announced that it is considering pulling out of involvement in the country’s first commercial offshore wind farm amid concerns about profitability. Although the Norwegian government has offered $2.17 billion in subsidies for the project, Shell executives believe that figure is insufficient to offset the expected financial losses.

Shell’s announcement followed another from the new chief executive of British Petroleum, Murray Auchincloss, who said that the company would be shifting away from renewables and focusing more on increasing oil output.

Under its previous leadership, the British energy giant shocked shareholders with its sudden embrace of so-called “net-zero” policies. It expanded its low-carbon business, including building two North Sea offshore power plants for Germany. But that decision resulted in annual profits falling from $27.7 billion in 2022 to $13.8 billion last year.

Other companies specializing in renewable energy production have also continued to see huge losses. Danish Ørsted, one of the leaders in offshore wind, was forced to write off a staggering $4 billion last year after it canceled two projects in New Jersey.

Among the reasons for the surprising decision, CEO Mads Nipper named a lack of subsidies and a failure to obtain adequate tax credits from the U.S. government – despite the fact that the Biden administration has provided the most generous tax credits and subsidies for green energy in American history.

“It speaks volumes about project efficiency if a company with a $165 billion market cap withdraws due to inaccessibility to subsidies,” observed Dr. Theo Starnberg, a former energy business analyst for Germany’s Christian Democrats (CDU). “It is clear that the “green” transition does not strengthen the economy of the United States or any other nation, and it is highly improbable it ever will.”

Orsted has also been forced to pause dividends for 2023 through 2025, lay off 800 of its 9,000 employees, and withdraw from offshore wind markets in Norway, Spain and Portugal. Nipper admitted the company had “felt the impact of market challenges over the past few years.” In other words, lucrative government subsidies still weren’t enough to keep the company profitable.

The industry’s hardships have been exacerbated as more wind turbines falter, explode and catch fire, revealing persistent issues with their quality. Siemens Energy, a leading producer of wind turbines, recorded a $5 billion annual net loss in 2023 and is expected to post a $2 billion loss in 2024. The company recently announced the redevelopment of faulty Siemens transformers at its Charlotte, North Carolina manufacturing plant.

Commenting on the dire financial situation of his firm, Siemens CEO Christian Bruch said, “One still has to note that… the speed at which grids and renewables are expanding is still not sufficient.”

“This sounds to me as a non-subtle suggestion that the taxpayers should put up more cash for his businesses,” commented Dr. Starnberg, adding that this was the only way to keep that firm afloat. “Energy policy is in urgent need of rationalization.”

However, rationalization does not appear near on the horizon. The U.S. government could dole out as much as $25 million to Siemens over the next several years. The Biden administration has also continued to approve offshore wind farms despite their relatively low power output, suspect reliability, and general unprofitability.

In the U.K., the British government recently increased the price per MWh that it pays to wind energy producers from 44 to 73 pounds, a move that some economists called “illogical.” All of this increase will be paid for by consumers.

The Biden administration is also in the midst of allocating $1.2 trillion over the next decade in green subsidies contained in the so-called “Inflation Reduction Act.” $156 billion of that will go toward renewable electricity production.

In total, world governments allocated an eye-watering $1.7 trillion to green energy companies and projects in 2023. Despite this, profit margins continued to shrink, while renewable stocks lost 30 percent of their value. Meanwhile, oil and gas companies saw record profits.

Some energy specialists have warned that the subsidies paid to renewable energy companies are little more than a continuous bail-out for an industry that will never be profitable. “It is an undeniable fact that oil, gas, and primarily coal will remain the cheapest and most reliable source that can fuel most economies,” said David Blackmon, an energy specialist with a forty-year career in the U.S. energy industry.

China and India, which have taken the opposite approach, have seen their energy sectors thrive. Last year, China opened 96 percent of the world’s new coal-fired power plants, consistent with Chinese Communist Party directives to prioritize energy security over climate issues.

India has similarly prioritized traditional forms of energy amid exploding demand in what is now the world’s most populous country.

Years of pouring taxpayer money into green energy have yielded precious few results. If governments in the United States and throughout the West do not change course soon, they may be facing both an economic crisis and an inability to keep the lights on.

Ben Solis is the pen name of an international affairs journalist, historian, and researcher.

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USN Retired
USN Retired
2 months ago

I’ve a novel idea . . . How about we quit with the government mandates, and let the free market, i.e. “Capitalism,” direct what ideas are winners and which ideas are losers. We would then (magically) have less debt and a more prosperous economy.

mtice
mtice
2 months ago

Plus the dirty little secret, there is nothing “green” about “green energy”. It is expensive, inefficient, and an environmental disaster. We should not be subsidizing it!

Robert
Robert
2 months ago

It’s just a shame that it has been so many years and trillions of wasted dollars for much of the word to find out what was already known.

Luke
Luke
2 months ago

It sounds like a perpetual bailout for these firms. Management does not have to be concerned about responsible investment.

Lon
Lon
2 months ago

Please raise your hand if you are surprised by this… I’ll wait.
It was a promise made by Uncle Joe Hairsniffer, so you have got to know it’s a lie by default.

zoe frost
zoe frost
2 months ago

The only green in green energy is the greenbacks the bamboozling scammers are stuffing into their wallets, or the wallets of their donors! Who remembers Solyndra, traitor Obama’s campaign donor who received $500,000,000 from him to produce solar panels (Obama was desperate for a “green” win).. No panels were ever produced, not one. Get this…Obama was ready to hand them another $500M, except Solyndra filed bankruptcy before he could authorize the money. And, Solyndra was one of about 20 such boondoggles the worst POTUS in history of America handed taxpayer money to.
The money grab “green” HOAX is now on steroids. The latest solar and wind endeavors primarily benefit JoeBama’s BFF ChiComs. In tandem, the traitors hope ending production of reliable energy sources will collapse the grid…their all but mandating electric vehicles (an enormous drain on electric power) will ensure it happens sooner than later! Guess who will be making the bulk of EVs? Yep, ChiComs. They’re building a plant in Mexico, intending to then ship the EV vehicles to America tax-free, tariff-free…economy-destroying, Republic-destroying traitors JoeBama approve.

Jimmy Page
Jimmy Page
2 months ago

End all subsidies NOW! We live in a capitalistic society. If you enter the wrong market and you loose your shirt… try a different market. Don’t expect the government to bail you out!

Jerry
Jerry
2 months ago

Green energy is a bunch of crap. It isn’t reliable and in the long run won’t supply the needed power.

Norman Stilwell
Norman Stilwell
2 months ago

When I say these firms are probably the biggest failure since the dot-com bubble, I always hear: give me proof. Voila, here is more than one piece of evidence. But unfortunately, junior investors are in danger of falling into this trap. This green propaganda is now everywhere, including whenever you wish to invest.

anna hubert
anna hubert
2 months ago

How many wind turbines are on Martha’s Vineyard?

Robert
Robert
2 months ago

How about testing these firms and their business projects against feasibility before spending even one cent of the taxpayers’ funds? Isn’t the highest time to rein on all budget subsidies and turn them into insured repayable loans?

Pat R
Pat R
2 months ago

So reality is finally setting in. But no doubt our government will continue throwing $$ after a failing situation as it usually does. Hey, it’s not their personal bank account shelling out funds. The money they use grows on trees you know; or at least they act like it does…no sense of economic responsibility exists in Congress when spending someone else’s money.

Theresa Coughlin
Theresa Coughlin
2 months ago

Another taxpayer funded ripoff. Didn’t these people learn anything from Solyndra?

Robert Zuccaro
Robert Zuccaro
2 months ago

Get Doc Brown on it: any man that can make a De Lorean travel time can do anything! Biden ain’t no Doc Brown, that’s for sure.

Melinda
Melinda
2 months ago

Stop the damn subsidies! A company that cannot start up and survive on it’s own should not be in business, especially those that are already financially profitable.

Ricky
Ricky
2 months ago

See, this is what happens when liberals are give half truths, they run with it. Remember Nutella, eat all you want and loose weight. Morons!

PoppaD
PoppaD
2 months ago

To think that if all that money had been put into nuclear power, the country would have abundant clean energy and less carbon emissions. How come there is so little embrace for nuclear power as it has become much more safe as a source of electricity? Past paranoia, maybe?

Harry
Harry
2 months ago

Screw that and screw the Democrats!! Ask just them to pay.

Brenda G
Brenda G
2 months ago

No more taxpayer money to fund these green energy businesses, ventures. All of the businesses, innovations sound great,but why do they have to be so backwards?What happened to looking at what is going to be needed, before so we can have all that is needed when we are using a vehicle which is electric?Are you aware,if at all before you purchase all supplies needed? It all sounds great, except the part where we are all funding their pet projects, but without a budget, plan for the completion and lastly; we don’t get to vote, actually don’t have a choice.

Jim H.
Jim H.
2 months ago

We are being forced to support a failing energy source just because it’s the wishes of the Democratic party. They are cutting the throat of this nation and it’s people, so much for the government working for it’s people

Rich
Rich
2 months ago

Let’s not forget that the wind turbine blades and solar panels have a short lifespan and then end up in landfills since they are non-recyclable.

Bob Chase
Bob Chase
2 months ago

Sure smells like a boondoggle to me! Seems the quality of these wind turbines is being pushed aside.
“Siemens CEO Christian Bruch said, “One still has to note that… the speed at which grids and renewables are expanding is still not sufficient.””
Never mind the failures, we need more of the same! Meanwhile the lame administration is furiously trying to shut down reliable power sources.

Hgk
Hgk
2 months ago

ELITES will continue to have power, serfs in the dark. Nothing new in that.

MAGA2024 vote TRUMP !!

johnh
johnh
2 months ago

Both Trump & Biden need to quit being Monday morning Quarterbcks in the Hamas/Israel war. Stop making this a political issue & ask yourself how would you like it if the world was telling USA how to take care of terrorists of 911 attack? I think that Bibi knows Hamas mode of operation much better than these two former presidents.

Mike
Mike
2 months ago

Yes, Congress should vote on a bill to recover these losses with commercial tools. The fiscal situation should be the context of this law. Besides, that bill should cut current subsidies to 1 percent if canceling them would cost taxpayers.

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