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Oil & Gas Business: Wind Becomes Spain’s Biggest Energy Source BUT For Every 1 Green Job Created 2.2 Jobs Are Lost Elsewhere In The Economy

Contributor: Rig Writer
Posted: 02/05/2013
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It’s official: last month, Spain became the only European country to derive the majority of its power generation from renewables.

Spanish network operator Red Elêctrica (REE) announced that wind generation had become the country’s single largest power source, outputting 4,738 GWh of electricity in March and accounting for 21 per cent of the country’s total generation.

Hydroelectric and solar power also weighed in to Iberian nation’s total, accounting for 17.3% per cent and 2.6 per cent respectively.

President of Spain’s Wind Industry Association (AEE), Josê Donoso, said in a statement: "This historic milestone reached by wind energy shows that this energy source, as well as being indigenous, clean and increasingly competitive, is also capable of supplying power to three million Spanish households."

Before we cheer too loudly, though, let’s not forget Professor Gabriel Calzada Âlvarez’s awkwardly-named but tremendously insightful 2009 paper "Study of the effects on employment of public aid to renewable energy sources".

The 52 page document represents a thorough examination of Spain’s green sector in the two decades from 1997 to 2009, and comes to some startling conclusions on environmentally friendly employment. Below are a few choice extracts:

  • The study calculates that since 2000 Spain spent €571,138 to create each "green job", including subsidies of more than €1 million per wind industry job. ( Page 8 )
  • The study calculates that the programs creating those jobs also resulted in the destruction of nearly 110,500 jobs elsewhere in the economy, or 2.2 jobs destroyed for every "green job" created. ( Page 8 )
  • The total over-cost – the amount paid over the cost that would result from buying the electricity generated by the renewable power plants at the market price – that has been incurred from 2000 to 2008 (adjusting by 4% and calculating its net present value [NPV] in 2008), amounts to 7,918.54 million Euros (appx. $10 billion USD). ( Page 8 )
  • Renewables consume enormous taxpayer resources. In Spain, the average annuity payable to renewables is equivalent to 4.35% of all VAT collected, 3.45% of the household income tax, or 5.6% of the corporate income tax for 2007. ( Page 10)

While it is an important mission for humanity to free itself from the yoke of fossil fuels, the economic and, ultimately, societal realities of doing so are sobering. Âlvarez perhaps sums this up better than I could:

"The problem with this plan is that the resources used to create "green jobs" must be obtained from elsewhere in the economy. Therefore, this type of policy tends to create not just a crowding-out effect but also a net destruction of capital insofar as the investment necessary must be subsidized to a great extent and this is carried out by absorbing or destroying capital from the rest of the economy." (Page 37)

by Tim Haidar

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Contributor: Rig Writer