Table of Contents

The 1NC

Picking Losers DA

1NC Shell Case Turn

Market interest is diversifying innovation makes a variety of energies costcompetitive. Wade 14:
Wade 14. Will Wade [renewable energy editor for Bloomberg News] Utilities
Threatened by Competitive Renewable Energy Growth] Renewable Energy
World, 4/9/14.

Technology is catching up with Thomas Edisons electricity industry, eating away at the utility
business model that hasnt changed much in a century. Clean energy installation will almost
triple to 290 gigawatts in 2030, driven by a plunge in the cost of wind and solar power,
Bloomberg New Energy Finance forecast at its conference, which finshes in New York today.
Electricity from wind and solar is now competitive on price against coal and natural gas in
places such as Chile and Texas. Thats forcing utilities to rethink how they obtain power as the number of places multiplies where renewables holds their own
against fossil fuels. Its not going to be your grandfathers energy industry, Nancy Pfund, a managing partner at the San Francisco-based venture capital company DBL Investors LLC, said at
the conference. Were going to see a parallel evolution in energy like weve seen in computing, phones and radio. There really hasnt been an innovation cycle in energy in 100 years.

Wind power in some parts of Texas, without subsidies, is now about 3.7 cents a kilowatthour. Thats about as cheap as anything from fossil fuels, said Michael Liebreich, chairman
of New Energy Finances advisory board. A 70-megawatt solar farm under construction in Chile is expected to sell power on the spot market,
competing head-to-head with electricity from other sources. These examples arent typical. West Texas is one of the windiest parts of the U.S., and northern Chiles Atacama desert is the

Competitive Islands Liebreich described these as islands of competitiveness

where renewable power can compete without subsidies. These islands have been growing
for decades. Exelon Corp. CEO Chris Crane, whose company is the biggest U.S. nuclear
power generator, said he expects more renewables and natural gas to enter the energy mix
in the next few years, though theres still a place for its atomic plants. He said government policy is one of the
sunniest place on Earth.

main drivers for change. The cost of solar panels has declined 62 percent since the start of 2011, and wind turbines have come down 12 percent, according to data compiled by New Energy

Renewables are within striking distance of being competitive on their own two feet,
Liebreich said. Energy companies must plan for a future without subsidies for renewables, said General Electric Co. Chief Executive Officer Jeffrey Immelt. My assumption is
Finance.

that there will be a time when its not subsidized, Immelt said at the conference. The cost of electricity counts. Renewables have to find their way to the grid unsubsidized. Shut Up
Immelt said he spends so much time telling coal-heavy power generators they have to change that executives tell him shut up Jeffrey. The industrys business model, with centralized power
plants distributing electricity to customers hasnt changed much since Thomas Edison flipped the switch on the first investor-owned power plant in Manhattan in 1882. GE, the biggest U.S.
supplier of turbines, is working to drive down costs by improving its wind designs, potentially expanding those islands of competitiveness. Utilities arent likely to disappear even though
renewable energy is transforming the industry, said Arno Harris, CEO of Recurrent Energy, the U.S. solar unit of the Japanese electronics maker Sharp Corp. You cant just take on the utilities

Its inevitable that solar will become a bigger part of the

energy mix and we need the utilities to help manage the grid . Still, utilities need to go further in adapting to the new reality,
said First Solar Inc. CEO Jim Hughes. A Beginning The technology onslaught is not near an end , Hughes said on a panel discussion. Its
at a beginning. He expects to see new systems developed that will manage solar power as its produced and as it travels across the grid. We dont think anyone in the
business can sit on their hands. Things will continue to progress. Costs will continue to come down . Financing is also driving
down the cost of renewables, said Jigar Shah, the founder and former CEO of SunEdison LLC. Capital costs are now often less than 6 percent to 7 percent, in
and destroy them, Harris said in an interview at the conference.

step with other industries, as investors become more comfortable with backing renewable energy projects. Most people in this room believe that access to the lowest cost of capital is
completed, said Shah, whos now a consultant. The question is: can developers develop enough projects to satiate the money? Can this industry really deliver the deals now that the money
isnt an issue? Can you feed the beast? We are long money and short deals.

The aff arbitrarily picks winners, ending innovation. Turns case. Loris 13:
Loris 13. Nicolas Loris [A senior policy analyst in Heritage's Roe Institute for
Economic Policy Studies] Spurring Investment in Americas Clean Energy
Technology, From a Testimony of the U.S. Senate Committee on Energy and
Natural Resource, The Heritage Foundation, 7/18/2013.
All energy sources and technologies should have an opportunity to compete in the
marketplace. Those investment decisions are best left for the private sector. The
governments intervention in capital markets artificially lowers the risk of a project,
decreases the incentive to innovate, and increases the incentive to use the political process
to lobby for handouts. Full or partial government investments reward special interests over market viability; those technologies that are
truly marketable should not need financial support from the taxpayer. Congress should adopt free-market policies
and reduce unnecessary roadblocks to clean energy investments, but it is not the role of the federal government to play venture capitalist. Private investors should take the risk and reap the
benefits or suffer the losses from their investments.

Government involvement impedes that process at the risk of the

taxpayer and to the detriment of the American economy . Government Meddling Distorts Investment Opportunity The number of
investment opportunities is broad and expansive, but the capital to finance them is not. This requires that choices be made among the different investments. Through a
number of mechanisms, including grants, loans, loan guarantees, mandates, and targeted
tax credits, the federal government clouds these decisions. Government investments essentially pull capital out of those

limited reserves and dictate who should receive it. While established and sure-bet companies will likely still receive a loan, those that are more on the margin may lose an opportunity.

higher-reward
companies that drive innovation and bring new services and technologies into the
marketplace may not get support, while companies with strong political connections or those that produce something that politicians find appealing will
Because capital is in limited supply, a dollar loaned to a government-backed project will not be available for some other project. This means that the higher-risk,

get support. The market, not politicians in Washington, is much better at determining how to allocate resources to meet consumer demand. When a firm minimizes costs, the firm not only

By attempting to
force government-developed technologies into the market, the government diminishes the
role of the entrepreneur and crowds out private-sector investment. This practice of the
government picking winners and losers denies energy technologies the opportunity to
compete in the marketplace, which is the only proven way to develop market-viable
products. When the government attempts to drive technological commercialization, it
circumvents this critical process. Furthermore, when the government dictates how private-sector resources are spent, both industries that stand to benefit
and those that are harmed by those policy decisions will concentrate more effort into lobbying for government handouts to prevent competitors from receiving the handout. This
process, which results in the political process continually picking winners and losers, has been
maximizes profit but also maximizes value to the consumer. The governments interference in capital markets significantly distorts that process.

identified by economist Gordon Tullock and later defined by economist Anne Kreuger as rent-seeking.[1] Rather than engaging in a profit-seeking behavior, the producer is engaging in a rentseeking behavior. The more the government involves itself in decisions that should be made in private financial markets, the more the American economy will experience misallocated labor
and capital. The result will be less economic growth, not more. Capital Markets, Opportunity, and the Valley of Wealth The barometer of whether a good or service should be in the
marketplace should be determined by the value of the output being greater than the input. We see investments that pay off, in both the short run and the long run, all the time without the
federal government artificially propping up the value by lowering the risk with taxpayer dollars. Contrary to popular assertion, private investors will finance projects with longer-term payoffs.
Amazon.com was founded in 1994 and went public in 1997 with a business plan that did not expect a profit for four to five years. The dot-com bust delayed Amazons progress, and it made
its first full-year profit in 2003.[2] More recently, and in terms of energy development, the United States is witnessing a shift to a cleaner energy source: natural gas. The investments are
pouring in and the result has been lower energy prices, increased employment, and resurgence in the manufacturing industry. Proponents of government investments in energy are quick to
respond that the federal government helped create the shale oil and shale gas boom. But government involvement came years after the private sector developed the method. The roots of
hydraulic fracturing go back as far as the 1860s and Stanolind Oil and Gas Corporation began studying and testing the method, with a patent issued in 1949 and a license granted to
Halliburton to frack on two commercial wells. The Department of Energy partially funded data accumulation, microseismic mapping, the first horizontal well, and tax credits to extract
unconventional gas. These activities would likely have occurred and should be driven by the oil and gas industry. Nevertheless, the real driver behind the revolution was George Mitchell, who
invested millions of his own money in research and development for fracking and horizontal drilling. His companys geologist, Jim Henry, first identified Barnett shale as a possibility for more
energy. It took 20 years for their experiments with fracking fluids and techniques to find one that was cost effective and, as we know now, wildly successful. Saying that without government
spending we would not have the natural gas production we have today is like saying without the grocery store down the street from your house, you would starve. You find another way to get

The problem with the federal governments investment in the clean energy economy is
that it does not allow technologies and companies to find another way, but instead induces
them to rely on the crutch of the taxpayer. If the cost of renewable energy technologies
decreases or improves and price of conventional energy increases, we may see increased
generation.
food.

The 2NC

Uniqueness

Innovation Now
Innovation with in the renewable industry now.
Grimes 11, Freelance Writer at Discovery Communications Director of Creative Services at Tucker
Mott Companies (Gerlinda, Freelance Writer at Discovery Communications. Director of Creative Services
at Tucker Mott Companies, What is the cheapest new alternative energy? Institute for Energy
Research. "Levilized Cost of New Electricity Generating Technologies." Feb. 1, 2011. (April 22,
2011)http://www.instituteforenergyresearch.org/2009/05/12/levelized-cost-of-new-generatingtechnologies/Gerson Lehrman Group. "Windy Energy Obstacles and Potential." Jan. 22, 2009. (April 22,
2011) http://www.glgroup.com/News/Wind-Energy-Obstacles-and-Potential-31784.htmlGlanz, James.
"Geothermal Power." New York Times. Dec. 11, 2009. (April 22, 2011)
There's no doubt about it: The environmental movement is coming of age. From solar-powered watches and cars that run on
salt water to naturally derived cleaning sprays and curbside recycling; lots of people are going green. Nevertheless, when it comes to highticket items, like the cars we drive and how we power our homes, the steep costs of alternative energy sometimes keep us from making the
greenest choices. Scientists, researchers and advocates for green technologies are working hard to bring down these costs. Solar power has
been one of the most expensive sources of alternative energy, but recent research using magnetic fields to collect solar energy without the
need for expensive photovoltaic cells could dramatically reduce its costs in the future. Wind farms are another promising renewable energy
resource; however, collecting and conveying the power of the wind presents an expensive obstacle. Geothermal power (energy from the heat
found inside the earth's crust) seems like the perfect way to cheap, infinitely renewable power -- except for the dangerous earthquakes that

Technologies for harvesting and storing alternative

energy are all evolving so quickly that it's difficult to say which new alternative energy
source is the cheapest. Today's promising technology may be surpassed by something even greener tomorrow. Furthermore,
regional characteristics have a huge effect on the cost of alternative energies , making
resources like solar power cheaper in the sun-drenched desert than it is in the cloudy Northwest. Also,
might occur as a result of collecting the Earth's steam.

interesting new sources of energy, including underwater vibration and sewer biogas, may one day prove to be cheap sources of green energy.
However, these haven't been tested or implemented widely enough to be cost-competitive. Still other
alternative energies like biodiesel aren't strictly renewable, but the fact that we can use them in existing vehicle fleets makes them a viable, if
not exactly dirt cheap, alternative energy option in the short term. In conclusion, todays impractical and costly alternative power technology
may well be tomorrow's energy mainstay. Scientists are exploring tons of alternative energy avenues, so cheap new alternative energy could
be right around the corner. Find related articles and lots more information on the next page.

Economy Recovering
U.S. econ. poised to recover most recent evidence
Ezrati 14 senior economist and market strategist for Lord, Abbett, and Co. (Milton, Author of Thirty
Tomorrows: The Next Three Decades of Globalization, Demographics, and How We Live, The Economy
Can Get Its Mojo back, Huffington Post, 7-15-14, http://www.huffingtonpost.com/milton-ezrati/theeconomy-can-get-its-m_b_5585234.html, 7-15-14)

It has disappointed from the start. This so-called economic recovery has developed too slowly, benefited Wall Street more than Main Street,
and done precious little to help the still huge army of unemployed. The sorry experience has engendered a fear that the economy's "new
normal" can no longer deliver the prosperity gains to which Americans once accustomed themselves and thought their due. It is frightening,

But such a sad fate is far from assured. A return to higher-paced growth is entirely
possible, if, that is, two things happen : 1) Corporate America sheds the fears that have gripped it since
the 2008-09 "great recession." 2) The country as a whole and its business sector in particular can find
clarity in Washington. The great recession created a lot of lasting harm. Because it brought many firms to the brink of bankruptcy,
especially for the young.

because many had trouble meeting payroll in 2009 and found no financial support when they went to banks for help, managements to this
day, five years after the upturn began, remain extremely risk shy. This is a problem .

Though it is fine to minimize risk, a

willingness to take it is a crucial part of the growth equation. Timidity has made managements reluctant to hire,

especially full-time staff. Instead of payroll growth of 400,000 a month that past recoveries exhibited, this time the Labor Department reports,
payrolls have increased at a pace closer to 200,000 a month, so slim that a report of 288,000 new hires for June created excitement when in
the past it would have engendered concern. That same stifling caution has kept spending on new capital equipment and facilities similarly
stunted. The fear shows, too, in corporate finances. According to the Federal Reserve, non-financial corporations presently hold a whopping
$1.5 trillion in cash and cash-like assets on their balance sheets. So afraid are they that they will accept piddling rates on deposits rather than

Time is the only remedy for this growth retardant. Only when the memories of
these traumas fade will managements regain what the great economist John Maynard Keynes called
their "animal spirits" sufficiently drive an economic acceleration with new hiring and spending on
upgrades as well as new capacity. How much time this will take remains an open question. There is,
however, a tentative sign that the turn may have begun. Spending on mergers and acquisitions have
risen dramatically. Year to date, according to industry sources, close to $700 billion has changed hands in such endeavors . If
managements will risk funds in this way, perhaps in time they will increase rates of hiring and capital
spending. In the meantime, the last five years of timidity suggests that the change will come slowly at best. The other matter blocking a
risk the monies on expansion.

return to more rapid growth is the complex legislation passed by Washington in 2010. It is not so much whether the Affordable Care Act or the
Dodd Frank financial reform legislation are good or bad laws. Even if they were brilliant pieces of legislation, and that is debatable, their
sweeping nature and complexity have generated enough uncertainty about future labor and credit costs to exaggerate all the debilitating
cautions created by the great recession. It is not just because the thousands of pages of either bill are difficult to interpret, although that is a
factor, but Washington's regulators have yet to write the hundreds of rules required to implement the laws. According to a recent study, even
now almost four years after the Dodd-Frank legislation passed into law, 190 of the 398 rules outlined in its 3,200 pages have yet to be written.
The Affordable Care Act looks little different. And it is the uncertainty that creates the damage. Even if the ultimate impact is increased greatly
costs, that certain knowledge would at least allow managers to make their plans on reasonable calculations. They might then do less than they
otherwise would, but they would do more than presently, when huge unknowns prompt them to err on the side of caution to an extreme. There
was some hope that the scheduled 2014 implementation of the Affordable Care Act would bring welcome clarity, but the postponement of
many of its major provisions has delayed that sense for at least another 12-18 months, maybe more.

Links

Generic
Picking winners collapses other renewables special subsidies make other
options unattractive
Cohen 14 (Bonner R. Cohen, senior fellow with the National Center for Public Policy Research, Heartland, 7/15/14, http://news.heartland.org/newspaperarticle/2014/07/15/wind-industry-attacks-california-solar-subsidies, accessed 7/17/14)

The California Wind Energy Association and other renewable energy groups criticized a new law
extending special tax breaks to the California solar power industry. Wind power, biomass, and
geothermal power groups say the special benefits for solar power tilt the playing field against other
renewable power options. Senate Bill 871, signed by Gov. Jerry Brown on June 20, extends until 2025 an exemption for solar power
systems from state property taxes. The existing exemption was not scheduled to expire until 2017, but the legislature rushed the new
exemption into law at the end of the session with almost no advance notice or opportunity for debate. Renewable Groups Criticize Solar Deal
"There is no reason for the State Legislature and Governor Brown to extend a property tax exemption to large scale solar energy projects at

"What is disturbing is
this tax break for the solar industry comes at a time when existing biomass projects are shutting down ,"
Julee Malinowski-Ball, executive director for the California Biomass Energy Alliance, said in the same press statement. " Wind and
geothermal renewable energy producers are also facing challenges in getting utilities to recontract for
their existing resources. California needs these resources to balance our energy portfolio and meet
long-term greenhouse gas reduction goals." The original intent of the property tax exemption was to help stimulate what was
this time," said Nancy Rader, executive director of the California Wind Energy Association, in a press statement.

once a fledgling industry. Today, solar PV is thriving and utility-scale solar is expected to increase more than 1,200 percent between 2012 and
2020, according to California Public Utilities Commission (CPUC) projections, the three renewable energy groups noted in the press statement.
Unnecessary Rush to Subsidize Section 73 of the California Revenue and Taxation Code allows a property tax exemption for certain types of
solar energy systems installed between January 1, 1999 and December 31, 2016. AB 1451 amended this section was amended in 2008 to
include the construction of an active solar energy system installed by the owner-builder in the initial construction of a new building the ownerbuilder does not intend to occupy. Established in 2002, and accelerated by the enactment of two additional laws in 2006 and 2011, Californias
Renewable Portfolio Standard (RPS) requires investor-owned utilities, electric service providers, and community-choice aggregators to increase
procurement from eligible renewable energy sources to 33 percent of total procurement by 2020. Non-Solar Renewables StrugglingIt is
amazing how the renewable energy industry is struggling in California even with mind-boggling federal, state, and local subsidies, said Jay
Lehr, science director for the Heartland Institute, which publishes Environment & Climate News. The CPUC projects geothermal and biomass
power will decline by 50 percent in the state by 2020 despite enormous subsidies. Wind, too, is encountering turbulence in trying to secure
contract renewals that would enable 1,500 megawatts of old wind turbines to be replaced by many fewer newer ones, according to the
California political news site Fox & Hounds. The bickering among competing renewable power industries illustrates how they care little about
the national and California environment and economy, but instead are merely looking to pad their pocketbooks at taxpayer expense, Lehr
observed. Welcome to the FoldTodays squabbles among the already heavily subsidized renewable energy producers may be a sign of things to
come. John Droz, a physicist and energy analyst, says it is ludicrous that subsidy-dependent renewable energy industries complain about the
subsidies received by other renewable energy industries. If this isnt a case of the pot calling the kettle black, I dont know what is, said Droz.
Wind producers have no leg to stand on when it comes to subsidies, agreed Daniel Simmons, director of regulatory and state affairs at the
Institute for Energy Research. Wind and solar are both dependent on subsidies for the large increase in installations we have seen over the
past few years, Simmons explained. But if this means wind producers no longer want subsidies for any energy sources, then we welcome
them into the fold. Look in the MirrorThe wind power industry is taking hypocrisy to new levels in their protests against solar power, Lehr
observed. Wind power needs to look in the mirror. Big Wind claims solar power subsidies were designed long ago merely to help a fledgling
industry get on its feet. That, however, is the exact same model the wind power industry has been advocating for its own taxpayer subsidies.
Now, decades later, the wind power industry continues to push for never-ending subsidies to prop up an industry that will fall like a house of
cards without never-ending subsidies and guaranteed market share.

Subsidies
Subsidies are hurting renewable energys cost competitiveness
Jenevein 13, CEO of the Dallas-based Tang Energy Group. (Patrick, CEO of the Dallas-based Tang
Energy Group. Wind-Power Subsidies? No Thanks. I'm in the green-energy business. If Washington sent
a little less 'green' our way, it would be good for the industry.
http://online.wsj.com/news/articles/SB10001424127887323501004578386501479255158, April 1, 2013
Jul 16, 2014) MS
The sequester has led to dire warnings from many camps, including advocates of clean energy, who argue that Washington's modest cuts

But from my vantage as a CEO in the wind-power business, the sequester

offers Washington a rare opportunity to roll back misguided subsidies and maybe help reverse wind
power's stalling momentum. Since 2009, as part of the president's stimulus, wind-farm developers have been able to get a federal
could derail America's green future.

cash grant or tax credit covering up to 30% of their capital investment in a new project. This is especially attractive compared with another tax
credit that rewards wind farms based on how much power they actually produce. Through May 2012, according to the National Renewable
Energy Laboratory, Washington spent some $8.4 billion on these cash grants. But under the sequester, Uncle Sam is cutting the cash-grant

Advocates of clean energy should welcome this haircut and urge for
even more fundamental policy change. Government subsidies to new wind farms have only made the
industry less focused on reducing costs. In turn, the industry produces a product that isn't as efficient or
cheap as it might be if we focused less on working the political system and more on {R&D} research
and development. After the 2009 subsidy became available, wind farms were increasingly built in lesswindy locations, according to the Department of Energy's "2011 Wind Technologies Market Report." The
average wind-power project built in 2011 was located in an area with wind conditions 16% worse than
those of the average project in 1998-99. The Department of Energy admits that this trend is due at
least in part to the 2009 federal subsidy: Because the grants that companies receive aren't based on
how much power they produce, "it is possible that developers have seized this limited opportunity to
build out the less-energetic sites." Meanwhile, wind-power prices have increased to an average $54 per
megawatt-hour, compared with $37 in 2005. If our communities can't reasonably afford to purchase and
rely on the wind power we sell, it is difficult to make the moral case for our businesses, let alone an
economic one. Yet as long as these subsidies and tax credits exist, clean-energy executives will likely
spend most of their time pursuing advanced legal and accounting methods rather than investing in
studies, innovation, new transmission technology and turbine development . A quick glance at the American Wind
program by 8.7% between March 1 and Sept. 30.

Energy Association's website illustrates this. In July, the association is planning a Capitol Hill event aimed at "educating legislators" on the
importance of industry tax credits. Never mind improving the underlying fundamentals of the wind business. My own company began by
delivering clean energy (in the form of natural gas) to rural China, where families still used animal dung for cooking fuel. We entered the wind
business in the late 1990s, when a wind-turbine company asked us to provide electricity from its site when the wind wasn't blowing. Years
later, we oversaw a similar project but in reverse: In 2008, without a government subsidy, we built a wind farm in Lubbock, Texas, to
supplement at lower costs the delivery of electricity to a cottonseed-oil company. Such projects are likely the industry's future. Wind energy
will make marginalnot revolutionarycontributions. The industry's success in Texas (where my company is based, and which is the nation's
largest and cheapest producer of wind power) suggests that wind farms do make sense in relatively windy areas where electricity shortages
occur. But policy matters. California, which isn't located in the "wind belt," is America's second-largest wind-energy producer but also its
costliest. The state's high costs are partly due to "aggressive renewable energy policies . . . that give developers a strong negotiating
position," according to the Department of Energy report. The wind industry has largely been out-competed by natural gas, which has proved to
be a clean, reliable and cheap power source for the future without subsidies or even venture-capital funding. As such, my company isn't
planning any new investments in the wind business, even though we would love to still be worth the $2 billion we were several years ago. Of
course, we could yet be proven wrong by technological innovation. Without subsidies, the wind industry would be forced to take a hard fresh
look at its product. Fewer wind farms would be built, eliminating the market-distorting glut. And if there is truly a need for wind energy,
entrepreneurs who improve the business's fundamentals will find a way to compete.

Renewables subsidies have empirically worsened the industry

Morris and Nava 13 [Julian vice president of research at the Research Foundation, Victor
policy analyst for the Research foundation, FAIL: US HAS WASTED $154 BILLION ON 'RENEWABLE
ENERGY', Breitbart, 12-5-13, http://www.breitbart.com/Big-Government/2013/12/05/Energy-subsidiesare-going-to-junk-investments-and-failing-companies, 7-15-14]

In October, the Department of Energy announced $60 million in subsidies for solar energy research and development programs as part of the
SunShot Initiative. The primary goals of the program are to reduce the cost of photovoltaic solar energy systems by 75 percent and to double
the generation of clean energy in the U.S. over the next 25 yearsgoals that are probably unachievable. These announcements come on the
heels of the recent bankruptcy of the government-subsidized electric vehicle technology company ECOtality, which received $115 million in
federal stimulus grants. Of course, that followed the multimillion dollar failures of solar energy companies Solyndra ($529 million) and Abound
Solar ($70 million). With last weeks bankruptcy filing by government-backed hybrid car manufacturer Fisker Automotive, a failure which will
cost taxpayers $139 million, the question must be asked: Why is the federal government funneling good taxpayer money to bad companies
and failing technologies? The answer may be that cronyism and influence often decide where these loans and subsidies go. In a new study
published this week by Reason Foundation, we examined the loan guarantees made by the Department of Energy (DOE) under its Section
1705program from 2009 to 2011, which were part of the America Recovery and Reinvestment Act. We looked at lobbying expenditures by
recipient companies and correlated them with the size of loan guarantees received. We found a correlation suggesting that the DOE made
choices on the basis of the information that was most cognitively available information provided by lobbyists rather than on the basis of the
viability of the technology and the soundness of the company applying for the subsidies. In some cases we found evidence of even more direct

forms of cronyism. For instance, during his tenure as governor of Maine, now U.S. Senator Angus King signed into law a bill requiring utilities to
generate at least 30 percent of their electricity from green sources such as wind. After leaving the governors office, he founded a windenergy company, Independence Wind, whose first project, Record Hill Wind, received a $102 million loan guarantee from the Department of
Energy and King received a $407,000 success fee. The loan guarantee almost looks like a pat on the back from the DOE for Kings efforts

The worst part is that these crony subsidies and loan

guarantees arent even going to particularly sound companies or innovative forms of technology.
Twenty-two out of the 26 projects funded through the Section 1705 program were rated junk level
investments. Yet, they were given millions in taxpayer dollars. To date, only four of the projects have
been completed and three of the companies receiving Section 1705 loan guarantees have already gone
bankrupt. Several other recipients, including SoloPower and the Spanish company Abengoa Solar, are in the process of laying off workers,
selling off equipment, and are not paying contractors for services provided. The DOEs lack of skin in the game means that
they have less incentive to ensure that the money they spend is wisely invested in the best
technologies, and in the best companies. Its much easier to lobby or hoodwink the government into investing in a bad
company because unlike a venture capital firm, the money theyre playing with isnt their own its yours. Since 1973, U.S.
government agencies have spent $154.7 billion on renewable energy with very little to show for it .
Proponents of solar technology claim that their favored technology is on the verge of being competitive
with traditional forms of energy, but they have made the same claim since at least the mid-1990s.
Billions of dollars in subsidies later, solar still only comprises at most 0.2 percent of U.S. electricity
production according to the Energy Information Administration. Green energy subsidies benefit the
politically connected while harming future generations as hundreds of millions of dollars are added to
the countrys debt burden with each green failure. Its time to end all subsidiesfor all energy
companies, not just green onesand let the best technologies win .
in promoting their agenda while he was governor of Maine.

Renewable Subsidies Flawed Hurt innovation and ship investments abroad

Chambers 14 (Madeline Chambers, Reuters journalist, Reuters, 2/26/14,

http://uk.reuters.com/article/2014/02/26/germany-energy-idUKL6N0LV31I20140226, accessed 7/21/14)

A commission of experts appointed by the German parliament has recommended
Chancellor Angela Merkel's government to abolish all subsidies for green energy, highlighting mounting
opposition to plans to reform instead of scrap the system. Economy and Energy Minister Sigmar Gabriel is finalising
Feb 26 (Reuters) -

much-disputed changes to the Renewable Energy Law (EEG) which includes reductions in subsidies for green energy before he presents it to

economy to energy from the sun and wind and away from nuclear and fossil fuels is a top
But the project, which offers some 20 billion euros in green
subsidies a year and is paid for by electricity users, has been dogged by the competing interests of
industry, a booming green sector and the country's 16 federal states. The Commission for Research and Innovation
(EFI) handed its report to Merkel on Wednesday. It concluded that the system of feed-in-tariffs, under which green
power producers are paid guaranteed, above-market prices to put electricity on the grid, is
fundamentally flawed. It is not a cost-efficient instrument for climate protection and is not producing a
measurable effect on innovation, said the report, basing its view on patent filings. "For both these reasons, there is no justification
cabinet in early April. Shifting Europe's biggest

priority of Merkel's new right-left coalition government.

for a continuation of the EEG," the report said. The report is unlikely to have much impact on policy. A spokeswoman for the economy ministry
rejected the criticism, saying the law had been a useful instrument to introduce renewable energy to the market place. Green energy accounts
for about 25 percent of German power generation, up from about 7 percent in 2000. The government is aiming for a level of 40-45 percent by
2025. "The Renewable Energy Law is and remains a core instrument for German climate and energy policy," said the ministry spokeswoman.
Supporters of renewable energy also dismissed the report, saying patent numbers are of limited use as a measure of innovation and that the
EEG cannot be blamed for failings in tackling climate change. Gabriel plans to scale back subsidies for renewable energy by up to about a third
over time. He also aims to reduce exemptions enjoyed by energy-intensive German firms from a surcharge, which pays for the subsidies And
wants to make firms that generate their own power pay charges to support green power. German industry, however, seized on the report to
support its opposition to incentives for renewable energy. "I support the conclusions of the Commission in terms of the need to reform the

"All support for renewable technologies must

be designed in a way to help incentives (for companies to be) competitive and innovative," he said.
Export-oriented companies have warned that a sharp rise in the price they pay for power, buoyed by
the cost of green incentives, are making them uncompetitive and some have threatened to shift
investments and production abroad. With industry accounting for around a quarter of Germany's economy, its voice matters in
Berlin. The BDI has said the government's plans put about 900,000 jobs in Germany at risk.
EEG," said Markus Kerber, managing director of the BDI industry association.

Government Investment
Government investment kills innovation in renewable innovation best path
is one free of government involvement
Savitz 13 [Eric staff writer for Forbes, Government Subsidies: Silent Killer Of Renewable Energy,
Forbes Online, 2/14/2013, http://www.forbes.com/sites/ciocentral/2013/02/14/government-subsidiessilent-killer-of-renewable-energy/, 7/15/2014]
Note: Paul Nahi is the CEO of Enphase Energy

Hardly a day goes by that we dont hear or engage in a conversation about energy. Too often, those conversations are about failed companies
that lived only for government largesse. Whether the discussion is about the cost of energy, the damage being done to the environment, or
national security issues, there is one constant: everyone agrees that the world needs safe, clean, and affordable energy. As the chief executive

And
the best pathway to a stable renewable energy industry is to create self-sufficiency and independence
from government financial assistance. One might question the rationality of this position, given the fact that between 1994 and
of a solar technology company, no one wants an abundant supply of clean energy and a healthy solar energy industry more than I do.

2009 the U.S. oil and gas industries received a cumulative $446.96 billion in subsidies, compared to just $5.93 billion given to renewables in
those years. (The nuclear industry, by the way. received $185 billion in federal subsidies between 1947 and 1999.) Certainly, subsidies are a

But where there is no projected end to funding, subsidies stop

being a catalyst, and start becoming a crutch . This is especially true when companies supported by
subsidies become powerful enough to influence governments to perpetuate their support . Healthy companies
depend upon sound business models in a competitive environment. Lousy companies that are limping along on subsidies
will slow the growth of the industry. If a product is well designed and meets the needs of the consumer,
it will find success in a market economy. In that same market, the real costs of the product are
accounted for in a companys profit margin . That is not true of traditional energy companies. Complex
and arcane tax laws are used to subsidize these corporations and obscure the true cost of energy.
Government subsidies effectively transfer a portion of the costs to taxpayers, enabling artificially low
prices and inflated profits. Equally dangerous is the governments direct investment in private companies. Much has been made of
useful tool to help establish an emerging industry.

the current administrations investments in certain renewable energy companies, some of which failed. The politically motivated headlines
concerning these investments may serve as a rallying cry for critics, but they fail to identify the fundamental mistake. If the administration is
trying to cultivate a new industry by leveling a playing field, it needs to focus on demand creation and not try to manage supply. In doing so, it
will unleash talented entrepreneurs as well as the investors willing to back them. Some companies will survive, others will not. But those that
do will have the essential ingredients for sustained success. There is absolutely a role for government in technology development. Most
companies, especially young ones, cannot afford to invest in basic research. The time frames are long, and only a small portion of the research
results in commercially viable products. Yet, this research is the foundation of future industries. Investment in basic research, through our
universities and research institutions, that yields licensable technologies, is a more prudent path for the allocation of public resources. The
confusion behind energy subsidies coupled with slanted media coverage has resulted in a myth that solar power is not cost competitive and is
dependent on government subsidies. This is simply false. In many parts of the country today, solar energy is less expensive than conventional
forms of energy, creating consumer demand for solar to reduce monthly energy bills. And the solar industry is both an affordable and
sustainable source of clean energy, and a significant job creator. The U.S. solar workforce today is around 120,000 strong and growing. The
facts are clear. The costs of development and production of fossil fuel energy have been underwritten with our tax dollars to the benefit of a
few traditional energy companies. If we build the true costs into the price of all energy, solar power is not only competitive, its cheaper.
However we will only see that truth if we remove direct and indirect energy subsidies. We have a strong market for solar power today. We have
a willing market, the necessary technology, and an undisputable imperative to create a cleaner, safer planet. Im committed to leading a
company that delivers the best technology and service. We will continue to revolutionize power generation on a global scale, one kilowatt hour

But a robust, renewable energy market will remain hampered if the energy industry continues to
chase the next subsidy. For the good of our energy future , subsidies for all energy must eventually end .
at a time.

Tax Breaks
Government tax breaks deter new tech and innovation in renewables sector
Banks 13 [George David senior fellow and deputy director of the Nuclear Energy Program at
CSIS, Market Distorting Policies Will Lead to U.S. Nuclear Reactor Shutdowns, Center for Strategic and
International Studies, 8/29/13, http://csis.org/publication/market-distorting-policies-will-lead-us-nuclearreactor-shutdowns, 7/15/2014]
In most cases, the structure of those subsidies and mandates for renewables deters substantial privatesector investment in storage technology, because operators will continue to be paid for power
generated, regardless of market demand or associated system costs. Consequently, we are bearish on
the prospects for renewables transitioning from their current status as intermittent generation to
baseload. Most power produced from renewables in the United States will therefore remain dependent
on subsidies and mandates, maintaining an artificial market that is at substantial risk of failure if and
when government policies shift. In our evolving analysis, we are also watching events unfold in Europe,
where artificial markets for renewables are collapsing (e.g., Spain) and major utilities are shutting down
baseload generation because of subsidies and preferences for wind and solar power. Most of the threatened

generation is natural gasfired because the price of that feedstock is not competitive in todays market, but German industry sources have
warned that nuclear reactors could face early retirement as well. E.ONs CEO Johannes Teyssen recently warned that shutting down baseload
power plants was unavoidable if government renewable policies and regulation persist. Chancellor Angela Merkel of Germany has
acknowledged that the growth in renewables has resulted in huge problems for the system and has pledged a scale-back in related subsidies
if she is reelected. Across the European continent, nonetheless, we believe that subsidies and preferences for renewables will remain as long
as budgets permit the preservation of those artificial markets. Consequently, European regulators will increasingly require uneconomic
baseload to remain on the grid. In the case of Germany, regulators have 12 months to review an announcement by a utility to decommission a
power plant before it is shut down; if a power plant is deemed systemically important, the utility is required to continue operations for up to
two years and will receive fair compensation from the network operator. Taxpayers, therefore, would pay to maintain the artificial markets for
renewables and for the uneconomic baseload power generation that would otherwise be economic in the absence of market distortions.
Addressing this challenge is not just a problem in the United States and Europe. OECD has warned that security of electricity supply is

OECD recommends that governments and

regulators need to ensure the transparency of power generation costs when making policy decisions
impacting electricity markets. In the United States, we have certainly failed to take these steps, which if
not addressed in the near term will lead to long-run cost increases for power, thus undermining U.S.
economic competitiveness. Though domestic utilities in merchant markets are being squeezed significantly by market distortions,
the United States has yet to feel the full negative impact of these policies because of weak economic
growth, excess power capacity, and sufficient backup generation . As economic growth picks up and state renewable
threatened across member economies because of increased renewable penetration.

and efficiency targets increase substantially between now and 2025, we expect greater fallout and increased costs to the grid. Because of the
gap between policymaking in Washington and the states, however, we remain pessimistic that any federal initiative in the near term will
address the looming threat to a large percentage of the civil nuclear feet and the security of electricity supply. We suggest increased dialogue
between federal and state governments on the impact of energy mandates and subsidies on the grid and a transparent approach to analyzing

As part of that conversation, we believe that policymakers need to

discuss how the artificial market for wind and solar can evolve into a real market where those
generation sources can operate competitively without government support. In our opinion, renewable
tax credits, targets, and other market-distorting mandates should end, which would increase incentives
for private-sector investment in storage technologythe breakthrough of which is necessary to solve
the wind and solar intermittency problem. Given President Obamas plan to regulate greenhouse gas emissions across the
the true costs of increased renewable penetration.

nations power sector, utilities are better positioned than state and federal legislators to choose the best compliance option for meeting those
air quality standards.

Loan Guarantees
Innovative renewable tech being crushed loan guarantees based on crony
lobbyists
Morris and Nava 13 (Julian Morris and Victor Nava, VP of research and policy analyst at Reason

Foundation, Breitbart, 12/5/13, http://www.breitbart.com/Big-Government/2013/12/05/Energy-subsidiesare-going-to-junk-investments-and-failing-companies, accessed on 7/15/14)

announced $60 million in subsidies for solar energy research and development programs as part of
primary goals of the program are to reduce the cost of photovoltaic solar energy systems by 75 percent and to
double the generation of clean energy in the U.S. over the next 25 yearsgoals that are probably unachievable. These announcements
come on the heels of the recent bankruptcy of the government-subsidized electric vehicle technology company ECOtality, which
received $115 million in federal stimulus grants. Of course, that followed the multimillion dollar failures of solar energy companies Solyndra
($529 million) and Abound Solar ($70 million). With last weeks bankruptcy filing by government-backed hybrid car
In October, the Department of Energy
the SunShot Initiative. The

manufacturer Fisker Automotive, a failure which will cost taxpayers $139 million, the question must be asked: Why is the federal government
funneling good taxpayer money to bad companies and failing technologies? The answer may be that cronyism and influence often decide

In a new study published this week by Reason Foundation , we examined the

loan guarantees made by the Department of Energy (DOE) under its Section 1705 program from 2009
to 2011, which were part of the America Recovery and Reinvestment Act. We looked at lobbying
expenditures by recipient companies and correlated them with the size of loan guarantees received. We
found a correlation suggesting that the DOE made choices on the basis of the information that was
most cognitively available information provided by lobbyists rather than on the basis of the viability
of the technology and the soundness of the company applying for the subsidies. In some cases we found
where these loans and subsidies go.

evidence of even more direct forms of cronyism. For instance, during his tenure as governor of Maine, now U.S. Senator Angus King signed into
law a bill requiring utilities to generate at least 30 percent of their electricity from green sources such as wind. After leaving the governors
office, he founded a wind-energy company, Independence Wind, whose first project, Record Hill Wind, received a $102 million loan guarantee
from the Department of Energy and King received a $407,000 success fee. The loan guarantee almost looks like a pat on the back from

The worst part is that these crony

subsidies and loan guarantees arent even going to particularly sound companies or innovative forms of
technology. Twenty-two out of the 26 projects funded through the Section 1705 program were rated junk level investments. Yet, they
the DOE for Kings efforts in promoting their agenda while he was governor of Maine.

were given millions in taxpayer dollars. To date, only four of the projects have been completed and three of the companies receiving Section
1705 loan guarantees have already gone bankrupt. Several other recipients, including SoloPower and the Spanish company Abengoa Solar, are
in the process of laying off workers, selling off equipment, and are not paying contractors for services provided. The DOEs lack of skin in the
game means that they have less incentive to ensure that the money they spend is wisely invested in the best technologies, and in the best
companies. Its much easier to lobby or hoodwink the government into investing in a bad company because unlike a venture capital firm, the

U.S. government agencies have spent $154.7 billion

on renewable energy with very little to show for it. Proponents of solar technology claim that their favored technology is on the
verge of being competitive with traditional forms of energy, but they have made the same claim since at least the mid-1990s.
Billions of dollars in subsidies later, solar still only comprises at most 0.2 percent of U.S. electricity production according to the Energy
Information Administration. Green energy subsidies benefit the politically connected while harming future generations as hundreds
of millions of dollars are added to the countrys debt burden with each green failure. Its time to end all subsidiesfor all
energy companies, not just green onesand let the best technologies win .
money theyre playing with isnt their own its yours. Since 1973,

Loan Guarantees Fail Good investments would have gotten private funding
Nelson 12 (Jim Nelson, CEO of Solar3d a solar cell tech company, US government should trust the
free market for green energy investment, Renewable Energy World, 5/29/12,
http://www.renewableenergyworld.com/rea/news/article/2012/05/us-government-should-trust-the-freemarket-for-green-energy-investment, accessed 7/19/14)
The loan guarantee program should be retired permanently . The path to commercialization requires
brains, discipline and grit. It is rarely aided, and often impeded, by government involvement. Our

government should trust the free market forces that have made America great. The governments green energy policy includes two parts: (1)
supporting basic research, with the aim of developing new green energy technologies; and (2) making loan guarantees that promote the

Supporting basic research is an important role of government, but the loan

guarantee program is a wasteful mistake because it doesnt work. The Department of Energys loan
guarantee to Solyndra was an embarrassing example of the malfunction of the current system. The
investment was undoubtedly scrutinized and rejected by the Silicon Valley-based venture capital firms
organizations abundantly more qualified to identify good investments than government committees.
adoption of green energy technologies.

There was no urgent strategic need for the U.S. to have Solyndra rush its product to market. The decision to fund Solyndras attempt to
commercialize did not stand up to reason. However, politics ultimately trumped reason. The bureaucrats awarding the financial aid were

beholden to political masters, who had promised Americans that they were going to fix the U.S. economy by creating green jobs something
that could not possibly happen in any timeframe worthy of consideration. The price of the Solyndra failure was borne by the American people.
It would be interesting, but probably undiscoverable at this point, to know how many projects that are currently funded with loan guarantees

After technology is proven, good investments should be able

to get private funding and negate the need for government support. Bad investments shouldnt be
funded at all. Government has a legitimate role in supporting basic research. ARPA-e, the program that awards small
tranches of money for basic research and development in alternative energy, will receive $250 million in federal funding in 2012
would be funded privately if loan guarantees did not exist.

(half the amount lost at Solyndra alone). This program can and should be expanded. Its objective is to fund innovative technologies that will
improve the economics of alternative energy which is ultimately the only path to widespread adoption of renewable power. Simply stated,
there are three stages to introducing new technology into the market: Innovation. Universities, government labs and some companies
willingly and energetically take the technology risk of exploring new ways of doing things, and work on proving a concept. In this specific
situation, we are talking about creating energy. Go To Market. When a specific technology has been developed and its concept proven, the
focus moves to figuring out the best way to develop a prototype that can be manufactured and sold in the marketplace. Angel investors and
venture capitalists typically fund this stage. Expansion. Once a specific technology has reached the market, it needs to be developed into a
real, growing product that is both used and useful, thus crossing over into adoption by the public. Venture capitalists and private equity
provide investment for growth in these stages. One of the greatest strengths in America is innovation. It is a long and rich tradition for the U.S.
to lead the world in innovation. Government currently plays a key role in providing funds to many companies in the proof-of-concept stage, as
well as to national labs and universities developing new technologies. Steps two and three should be left to private investors. It is time to
make a change, and to restructure the governments broken system that currently funds agenda-driven enterprises that have little or no
chance of a successful early development stage. The intent of such agenda-driven grants is to create jobs. But when taxpayer money is
invested, spent and lost, the company fails and the jobs are lost. Government dabbling in investments beyond technology development is
competitive with private funding or it involves making investments that private investors wouldnt make both are bad ideas. I suggest the
following: Government immediately get out of the loan guarantee program and stop investing in companies at stages beyond technology
development. Making the decisions to guarantee loans is essentially making an investment decision that government bureaucracies are not
equipped to make. Bureaucracys agenda-driven analysts do not have necessary training, proper incentives or appropriate reporting structure
to make investment grade decisions. ARPA-E should become a public/private partnership, with the mandate to invest in game-changing energy
technology research. It will be staffed with professionals accustomed to making these types of investments, and qualified to evaluate projects
on their economic potential and practicality. Government should provide the funding to the entity, but the partnership should be consistent
with the long-term strategic plan of the government. The partnership should be evaluated on the basis of the success of their investments and
investment strategy. The professional investors should be told to make the focus of their investing broader than typical venture investing in
order to encourage other innovative ideas. Moreover, they should hand off their portfolio entities to private equity as they mature to ensure
commercial viability. Placed in the right hands this concept could be implemented in the first quarter of 2013. These are tangible, realistic and
relatively easy changes to make. Let the private sector do what it does best, help the economy grow and eventually thrive again. It is that
success that will bring jobs.

Solar
Solar incentives useless solar power cheaper than the grid
Farrell 14 (John Farrell, author of Energy Self-Reliant States and researcher at the institute for local
self-reliance, How to Phase Out Incentives and Grow Solar Energy, 5/5/14, http://grist.org/article/how-tophase-out-incentives-and-grow-solar-energy/?
utm_source=syndication&utm_medium=rss&utm_campaign=feed&utm_reader=feedly, accessed
7/19/14)
Over the next decade, solar electricity will let consumers get cheaper energy from their rooftop than
from their utility. Among the upheaval in the electricity system, the coming of solar grid parity means
re-thinking incentives for solar energy. The success of solar is remarkable, no less because the amount
of federal subsidy in absolute terms has been far less for renewable energy than for fossil fuel
resources (see graphic below). 1 As the cost of solar drops toward and below grid parity, the question is how to adjust solar
subsidies appropriately. Should they be eliminated immediately? Phased out? Or shifted from reducing the upfront cost to some other solarboosting strategy? This is the fifth of five parts of our Rooftop Revolution report being published in serial. Read

Part 1 or Part 2 or Part 3

or Part 4. Download the entire report and see our other resources here. Credit: Tommy McCall Strategies for Shifting Subsidies
Eliminating solar subsidies makes little sense as it could severely constrain the expansion of solar just as it becomes grid competitive. It will
mean short-term grid parity for the sunniest (or most expensive electricity) regions and leave the rest of America out in the cold for many
years, hardly a prescription for increasing clean energy and democratizing the electricity system. It could also severely damage the domestic
solar industry with a boom and bust cycle, a poor return for one of the few growth industries in the recent economic downturn. It also makes

But
keeping solar subsidies like the 30% federal tax credit unchanged after its 2016 expiration date also
seems senseless. Solar developers in sunny regions like California or high electricity price areas like New York will get out-sized returns
little sense for Americans to be providing incentives for established fossil fuel industries that make billions in profits each year.

from installing solar even as solar reached grid parity in the rest of the country. Furthermore, the tax incentive system continues to create
friction by preventing cities, schools and other non-taxable entities from using federal incentives. The guiding principle for solar subsidies
should be to continue the enormous strides toward democratizing the electricity system by maintaining the growth of distributed solar while
maximizing local ownership and economic benefit. No More Taxes! One strategy would be to shift away from the tax code. The use of the tax
code for solar incentives has long discriminated against solar for schools or libraries (and other public buildings) because these entities dont
pay taxes. The public-private partnerships required to make use the tax credits have inevitable transaction costs that mean public solar can
never quite compete with private solar and that also water down the value of federal money for solar. 2 One option is to shift to a refundable
tax credit, allowing those who are eligible for tax credits to take the full value whether or not they have sufficient tax equity. A better step
would be to shift away from tax credits entirely, using cash payments. Research has shown that federal taxpayers can get twice the solar for
each dollar of solar subsidy given in cash rather than credit. 3 The solar subsidy level should also be reduced (assuming costs continue to

Reducing the 30% incentive by 3 percentage points per year

would allow moderately sunny areas to continue solar growth without over-rewarding the sunniest
regions. The incentive would expire fully at the end of 2026 (the year before Seattle finally reaches grid parity). The following chart shows
decline) when the current tax credit expires in 2016.

that even with exponential growth in solar installations, a phase out would cap the impact on taxpayers. Cost of Federal Solar Subsidy
with Phase Out Shifting from Tax-Based Incentives to Cash Means More Solar The phase out could be further enhanced by linking the
subsidy cuts to the number of solar installations, price indices or the local solar resource. Strong market performance could reduce prices
faster while slow growth could mean slower price decreases. Flat electricity prices or a plateau in solar costs could slow the phase out, while
high price inflation or large decreases in the cost of installing solar could accelerate it. Sunny areas like Los Angeles could have the tax credit
immediately cut to 10% in 2017, while less sunny areas like Ohio could keep the 30% credit a bit longer. Many of these concepts are already
included in one of the worlds leading solar policies : a feed-in tariff. The Feed-In Tariff The intersection of electricity and solar
prices and the need for new policy provides an opportune moment to consider changing American solar policy to match what is used in the
most advanced solar economies. Three of the top four solar nations and nearly 90% of the worlds solar capacity has been installed with a
policy called a feed-in tariff.4 This solar financing tool is not a tax credit, but is a combination of a long-term contract, a guaranteed grid
connection, and a contract price sufficient for a modest return on investment. The contract provides secure financing for solar projects,
reducing borrowing costs and the total cost of solar electricity. The following chart illustrates the concept. A project with a feed-in tariff (FIT)
contract in 2011 gets paid a fixed rate per kWh over 20 years (the green line). The projects revenue is higher than the levelized cost of solar
(red line), and the area between these lines indicate the projects return (blue shaded region). Since the feed-in tariff contract price falls each
year, by 2016 an eligible solar project would get a much lower payment (orange line), commensurate with the falling cost of solar (yellow line).
The projects return on investment is the area between the two (pink shaded region). Solar Project Revenue with a Feed-In Tariff Feed-in
tariffs provide several potential advantages over a tax credit. Unlike the federal tax credit, feed-in tariff contract prices follow the
falling cost of solar. Without change, the federal tax credit could offer very high margins to solar power developers in Southern California and

the contract price of the German feed-in tariff

has fallen each year, in accordance with the size of the solar market (much like Californias Solar Initiative production
incentive). When the market is particularly strong, the price falls faster; if the market is weak, the price declines slower, creating a growth
other places where inexpensive solar competes with expensive electricity. But

corridor. The following chart illustrates the concept. Growth Corridor Provides Market Input to German Solar Subsidies This may
also prove useful as solar grows substantially. Right now, solar demands a price premium because it can deliver electricity when utilities need
it most on hot, sunny afternoons. But with critical mass, solar can erase utility price peaks, undercutting the time-of-day advantage. A feed-in
tariff can provide price stability for solar producers.5 Second, the German feed-in tariff has been changed in recent years to encourage more
on-site use of solar power. Individuals and businesses with on-site solar can install a separate meter to track actual on-site use of solar
electricity produced from their array, and receive bonus payments if it serves a higher portion of their load. The Germans hope the policy will
encourage the installation of on-site storage, because the more electricity is kept on-site, the higher the payments. In contrast, American net
metering policy simply reconciles solar electricity production with grid electricity consumption, on-site use is coincidental. The feed-in tariff
also solves the tax credit problem for the public sector, because the long-term contract is available to anyone, not just taxable entities or large
corporations with tax equity. It also allows more individuals to install and finance solar without needing a solar leasing arrangement (although
that remains an option). This can increase local ownership of solar, and with it, the economic value of distributed solar power for communities

it serves. Another spin on the feed-in tariff may be Minnesotas recently adopted value of solar policy. If implemented by eligible
utilities, it would provide solar producers with a 25-year, fixed price contract for their power production, paid as an electricity bill credit.
Production Payments (Feed-In Tariff Lite) Since there are potential legal and political hurdles to implementing a full feed-in tariff
program in the United States, a compromise policy might be a Feed-In Tariff Lite. Instead of providing the full contract price, the existing
federal solar subsidy could be converted to a production payment that would cover the difference between a regionally appropriate contract
price for solar (sufficient for the owner to earn a modest return on investment over 20 years) and the local net metering rate. Note: the
following chart is based on late 2012 solar energy prices, much higher than todays. Mechanics of a Federal Production Payment or
Feed-In Tariff Lite (20-year contract price) The following chart illustrates how the payments would be relatively small in regions with
ample sun and high electricity prices (and net metering rates). Payments would be larger in places like Seattle, where cheap electricity and
more moderate sunshine dominate. Since the value of net metering tends to rise with electricity prices (2% per year in our assumptions,
although actually 4-5% per year for most utilities over the past decade) and the cost of solar is falling (at 7% per year), using this program
wont be particularly expensive. If the federal government provided the margin for solar projects on a 20-year contract, and supported every
solar project in the next 10 years based on the growth expectations we used earlier, the programs peak cost would be under $20 billion in
2021, supporting 160 gigawatts of solar. This is in comparison to the current 30% tax credit, which cost over $3 billion in 2011, in support of
1.7 gigawatts of solar. Federal Cost of FIT Lite Program The above chart shows the cost of the FIT Lite program over the next 30 years
(projects coming online in 2021 would have contracts through 2040). We used the cost of solar and net metering rates for St. Louis as a proxy

The explosive growth of solar power has created a convergence of solar and
grid electricity prices. Within the next few years, millions of Americans will have a local, cost-effective ,
and cleaner alternative to grid electricity. The coming of solar grid parity opens an enormous opportunity for democratizing the
for the entire country. Conclusion

electricity system via thousands of distributed solar power systems. Unlike traditional electricity generation centrally planned and centrally
owned by large, private utilities solar on residential rooftops across the United States can open the electricity system to widespread
ownership of decentralized solar energy systems. The economic benefits of the transformation would likewise be widely spread. Technical and
political barriers remain, but are surmountable. The most serious barrier is the potentially serious disruption posed by the looming expiration
of the federal 30% tax credit (in 2016).

A thoughtless extension will enrich solar developers at the expense of

taxpayers; an abrupt expiration will seriously affect the solar market in the many regions that have not reached solar grid parity by 2016.

A hybrid policy approach is needed, whether to phase out the federal tax credit in a fashion that is geographically equitable or to shift to a
feed-in tariff strategy to be more comprehensively prepared for the economic issues of grid parity. Guidelines for limiting distributed
generation on local electricity systems can be modernized, vetted by data from actual solar power plants, and the limits raised. Already, public
utility commissions are considering changes to the 15% rules to allow more solar power on distribution systems, and further research may
reveal even greater potential without significant upgrades to the electric distribution system. Policies like net metering have provided a simple
accounting method for financing on-site solar power and can be improved by allowing for community net metering, lifting aggregate demand
caps, and providing policy alternatives like feed-in tariffs. The coming of solar grid parity portends an enormous opportunity for citizens to
become more energy self-reliant, to become power producers themselves, and to transform the grid to a decentralized and democratized
electricity system.

Impacts
Ending government subsidies forces competition
Shah 11 [Jigar CEO of Carbon War nonprofit company focused on fighting climate change via

entrepreneurs, expert on climate policy, It's Time to Kill Permanent Energy Subsidies, Fast Company,
5/5/2011, http://www.fastcoexist.com/1677980/its-time-to-kill-permanent-energy-subsidies, 7/15/2014]
The federal government should get rid of permanent energy subsidies for all energy sources , including
fossil fuels, nuclear, solar, wind, biofuels. This would force everyone to innovate, compete and win --or
lose--on their own merits. On April 25th, even Republican of the House John Boehner admitted that he thought that during a budget
crisis such as the one America is facing now, oil companies "ought to be paying their fair share" of tax revenues. President Obama quickly
pounced, sending a letter to Congressional leaders in both parties urging them to "eliminate unwarranted tax breaks for the oil and gas
industry, and to use those dollars to invest in clean energy to reduce our dependence on foreign oil." Boehner no doubt wishes he could stuff
that genie back in the bottle. Energy subsidies--both for oil and clean energy--never fail to raise hackles on both sides of the debate.
Proponents of subsidies for oil and gas production argue that eliminating them is a euphemism for raising taxes (and raising the price of gas),
which would be a job killer at a time when America needs jobs. Proponents of subsidies for clean energy say that without subsidies,

Permanent subsidies dont

create jobs and sharpen the competitive edges of new companies. Instead, they distort markets and kill
innovation. How? For starters, subsidies for oil and gas production have long been considered a way to ensure increased production and
renewables have no hope of besting the entrenched oil and gas industries. To both, I say, "Nonsense."

stable gasoline prices. Given the price of gasoline in your neighborhood today, how would you say that is working for you? Oil is a global

Subsidies also have

long been considered a way to give "infant industries" such as wind and solar a chance to grow and
mature before they have to stand on their own--just like parents pay for their kids' educations, clothes,
and piano lessons until they are old enough to get a job. Incubation subsidies make sense, but at some
point you have to push them out of the house . Maybe thats why mature renewables remain
uncompetitive--they are like kids who keep returning to live with their parents when the real world gets
tough. The truth is that permanent energy subsidies do more harm than good. They dont encourage
established energy providers to innovate ("Why bother when we get free money from the
government?") and they dont force new providers to rapidly scale their innovations. Permanent
subsidies are just plain bad for business--and history has shown us time and time again, solutions to big
problems that are bad for business have no hope of success. Phasing out all permanent energy
subsidies will give birth to competition for energy on a level playing field. May the best solutions win.
commodity; my sense is that the $120 per barrel price is incentive enough to encourage investors to the space.

Governments subsidies need to end-they are stunting the growth of the

market
Nahi, 2/14/2013 CEO of Enphase Energy, a provider of micro-inverter systems for the solar industry.
( Paul CEO of Enphase Energy, a provider of micro-inverter systems for the solar industry. Government
Subsidies: Silent Killer Of Renewable Energy
2/14/2014http://www.forbes.com/sites/ciocentral/2013/02/14/government-subsidies-silent-killer-ofrenewable-energy/,July 15, 2014) MS

Hardly a day goes by that we dont hear or engage in a conversation about energy. Too often, those conversations are about failed companies
that lived only for government largesse. Whether the discussion is about the cost of energy, the damage being done to the environment, or

As the chief
executive of a solar technology company, no one wants an abundant supply of clean energy and a
healthy solar energy industry more than I do. And the best pathway to a stable renewable energy
industry is to create self-sufficiency and independence from government financial
assistance. One might question the rationality of this position, given the fact that between 1994 and 2009 the U.S. oil and gas industries
national security issues, there is one constant: everyone agrees that the world needs safe, clean, and affordable energy.

received a cumulative $446.96 billion in subsidies, compared to just $5.93 billion given to renewables in those years. (The nuclear industry, by
the way, received $185 billion in federal subsidies between 1947 and 1999.) Certainly, subsidies are a useful tool to help establish an

where there is no projected end to funding, subsidies stop being a catalyst, and start
becoming a crutch. This is especially true when companies supported by subsidies become powerful enough to influence governments
to perpetuate their support. Healthy companies depend upon sound business models in a competitive
environment. Lousy companies that are limping along on subsidies will slow the growth of the industry . If a
emerging industry. But

product is well designed and meets the needs of the consumer, it will find success in a market economy. In that same market, the real costs of
the product are accounted for in a companys profit margin. That is not true of traditional energy companies .

Complex and arcane

tax laws are used to subsidize these corporations and obscure the true cost of energy . Government subsidies

effectively transfer a portion of the costs to taxpayers, enabling artificially low prices and inflated profits. Equally dangerous is the
governments direct investment in private companies. Much has been made of the current administrations investments in certain renewable
energy companies, some of which failed. The politically motivated headlines concerning these investments may serve as a rallying cry for
critics, but they fail to identify the fundamental mistake. If the administration is trying to cultivate a new industry by leveling a playing field, it

needs to focus on demand creation and not try to manage supply. In doing so, it will unleash talented entrepreneurs as well as the investors
willing to back them. Some companies will survive, others will not. But those that do will have the essential ingredients for sustained success.
There is absolutely a role for government in technology development. Most companies, especially young ones, cannot afford to invest in basic
research. The time frames are long, and only a small portion of the research results in commercially viable products. Yet, this research is the
foundation of future industries .

Investment in basic research, through our universities and research institutions,

that yields licensable technologies, is a more prudent path for the allocation of public resources . The
confusion behind energy subsidies coupled with slanted media coverage has resulted in a myth that
solar power is not cost competitive and is dependent on government subsidies. This is simply false. In many parts
of the country today, solar energy is less expensive than conventional forms of energy, creating consumer demand for solar to reduce monthly
energy bills. And the solar industry is both an affordable and sustainable source of clean energy, and a significant job creator. The U.S. solar
workforce today is around 120,000 strong and growing. The facts are clear. The costs of development and production of fossil fuel energy have
been underwritten with our tax dollars to the benefit of a few traditional energy companies. If we build the true costs into the price of all

However we will only see that truth if we remove direct and

indirect energy subsidies. We have a strong market for solar power today. We have a willing market, the necessary technology, and
energy, solar power is not only competitive, its cheaper.

an undisputable imperative to create a cleaner, safer planet. Im committed to leading a company that delivers the best technology and

But a robust, renewable

energy market will remain hampered if the energy industry continues to chase the next subsidy. For the
good of our energy future, subsidies for all energy must eventually end .
service. We will continue to revolutionize power generation on a global scale, one kilowatt hour at a time.

Gov. needs to stop with subsidies-the energy market can be competitive

without them
Loris 12, Policy Analyst at the Heritage Foundation (Nicolas Loris is the Heritage Foundations

Herbert and Joyce Morgan Fellow specializing in energy and environmental issues, Competition, Not
Handouts, Should Determine Role of Green Energy, Jan. 18, 2012, http://www.usnews.com/debateclub/should-the-government-invest-in-green-energy/competition-not-handouts-should-determine-roleof-green-energy, July 15, 2014) MS
The old adage If it aint broke, doesnt fix it" is one that does not apply to the government's investment in green energy. Subsidizing
inefficient, expensive technologies is a broken policy that has a simple solution: Stop picking winners
and losers in the energy sector and eliminate all subsidies. The primary justification for investing in green
energy is that those investments create green jobs. Government spending will "create" jobs in the sense that subsidies will allocate labor and
capital to build windmills and solar panels. Plus, it looks good come election time when a member of Congress can point to that plant and tell
his constituents he or she created those jobs. But government "investments" take from one (by taxing or borrowing) and give to another .

When the government gives money to build a windmill, those resources cannot simultaneously be used
to build other products. At best, there's no new job creation but an extraction of resources from one sector of the economy to the
politically preferred green sector. And since taxpayer dollars are subsidizing expensive, inefficient sources of energy,
those resources could be used more efficiently in the private sector, and consequently, U.S. economic
growth suffers on net. No evidence exists to suggest that the government has better knowledge to
make investment decisions or to commercialize technologies when the private sector chooses to
bypass these opportunities. If there is a role for alternative sources in America's energy portfolio, it should be dictated by price and
competition, not government handouts. The energy market can be diverse and competitive without government
interference.

Solvency
Government choosing winners and losers ends catastrophically ethanol
proves
Newman 12 (Rick Newman, 7/31/12, a journalist and author who specializes in business and consumer trends, US News,

http://www.usnews.com/news/blogs/rick-newman/2012/07/31/more-evidence-that-its-time-to-dumpethanol, accessed on 7/15/14) Like many bad ideas, it seemed like a good one at first. Unfortunately, Congress went way overboard.About
40 percent of the corn produced in America is used to make ethanol, a gasoline additive that ends up in most Americans' gas tanks. When
corn is cheap and plentiful, this is a marginally sensible idea. But when corn becomes scarce and prices risewhich is happening now, as a
withering drought wrecks much of the nation's corn cropethanol production competes directly with the use of corn for food, causing a

Some experts are now calling for Washington to temporarily issue waivers from the
law so that more corn can be diverted away from ethanol production and help stabilize rising food
priceswhich would help consumers not just in the United States, but in poorer countries as well. The problem is that subsidies
doled out by Washington for years have distorted the farm economy and left many growers
overdependent on a fuel that might not exist without Washington's help. So changing policies now would harm
needless rise in food prices.

some farmers who, rightly or not, have received implicit promises from Washington to protect their livelihood. Though it's less efficient than
gasoline, corn-based ethanol began to catch on as a home-grown motor fuel during the oil shocks of the 1970s, since it seemed like a way to

reduce U.S. dependence on oil from the volatile Middle East. Then it gained allure in the 1990s as a renewable fuel that helps reduce
emissions. In the early 2000s, President George W. Bush approved new measures that raised the requirements for the use of renewable fuels
mainly, corn ethanol.

All along, Congress, pushed by farm-state legislators, has cranked up ethanol subsidies,
which now stand at about $6 billion per year. This has happened even though ethanol is not very
appealing to consumers. The fuel economy it generates is about 25 percent lower than it is for gasoline, which is why the use of E85
(which is 85 percent ethanol and 15 percent gasoline) never really caught on, even though the Detroit automakers have produced millions of
"flex-fuel" vehicles with minor modifications that allow them to run on any blend of ethanol and gas. Ethanol costs about 30 cents less per
gallon than gasoline, but when you factor in the poorer mileage, the overall cost of running on E85 would be slightly higher for most drivers.
So there's no natural incentive to choose it over gasoline. Ethanol is still mixed with much of the gasoline sold at gas stations, in a blend
known as E10 (10 percent ethanol) which most cars can burn without any modifications. This serves two purposes: It oxygenates the gas,
which reduces harmful emissions and smog, and it pumps up sales for blenders and corn growers who benefit from the subsidies arranged by

tend to get lower gas mileage than the government's own

estimates is the presence of ethanol, which government mileage tests don't account for. Even Congress, however, has begun to
acknowledge that government support for ethanol needs to end , as federal budget cutters raise the
pressure to axe every wasteful dollar. Last year, the Senate voted to end the 45-cent-per-gallon federal subsidy on ethanol. The
their buddies in Congress. Many drivers don't know it, but one reason they

bill didn't make it out of Congress, but that was before this year's drought, which is raising the pressure to stop distorting the market for corn.
Still, that could take a while, because subsidies for ethanol have helped it grow into a $42 billion industry that employs about 90,000
Americans, and Congress may think twice about jeopardizing anybody's job in such a weak economy.

Economy
Increased government interference will wrecks the economy
Terry Miller 09, Director, Center for International Trade and Economics and the Mark A. Kolokotrones
Fellow in Economic Freedom, degrees in government and economics from the university of texas,
http://www.heritage.org/research/testimony/government-intervention-a-threat-to-economic-recovery
7/15, Byron Chin
The record of government interference in the economy, whether in the United States or in countries around the
world, is not pretty. The TARP and TALF programs, both initiated under the previous
administration, are good examples of the problems of government interference in markets. The policy-

makers involved argued that the programs were necessary to avoid an immediate melt-down in financial markets. We cannot, of course, know
what would have happened in the programs' absence. However, from the perspective of six months following their passage, we can see that

their lasting result has been not the hoped-for increase in stability and lending in credit markets, but rather greater
uncertainty and volatility. Markets need sure and stable government laws and policies in order to properly price assets. The
TARP, in particular, has created confusion and interfered with the establishment of a market-clearing price for
the troubled assets in question. There has been a disappointing lack of transparency in the program's decision-making processes that leaves
potential investors uncertain of the direction of the market and therefore unwilling to invest. The TARP may have artificially inflated the value
of the troubled assets, but it has done little to get them off the books of the financial institutions .

The fiscal stimulus package

passed under the current administration is even worse. Even if one accepts the Keynesian notion that increased
government spending can increase economic growth, and there are real doubts about this, almost none of the money has
actually been spent, or will be spent, in a timely fashion. One estimate this month is that only about $37 billion of the $787 billion
stimulus package has been spent so far. Most of the money is projected to be spent in the future when government stimulus will
no longer be appropriate and will most likely only contribute to inflationary pressure . The cost of these programs is
creating a huge debt for our children that will have to be financed somehow. If we continue them, we are going
to see either inflation or increased taxes or both, as well as a fall in the value of the dollar and decreased
foreign investment in the United States, lower productivity overall, and reduced economic growth in the future.
That is far from doing no harm.

Renewable subsidies destroy the economy and increase poverty

IER 14 (Institute for Energy Research, not-for-profit organization that conducts intensive research

and analysis on the functions, operations, and government regulation of global energy markets, 4/9/14,
http://instituteforenergyresearch.org/analysis/europe-slashing-renewable-subsidies-2/, accessed
7/16/15)
For years, Europe has claimed to be at the forefront in instituting policies to reduce greenhouse gas emissions to comply with the Kyoto

As part of that, Europe has been at the forefront of setting mandates for wind and solar
generation coupled with hefty renewable subsidies as enticements. The Europeans have found that
these subsidies have grown too large, are hurting their economies, and as a result are now slashing the
subsidies. In fact, the costs have become so enormous that governments in European countries are
unilaterally rewriting their contracts with renewable generating firms and reneging on the generous
deals they initially provided. Spain, for example, ended its feed-in-tariff, which guaranteed an extremely
high price for renewable power, replacing it with a much lower subsidy or in some cases no subsidy.
Spain is reeling from unanticipated cost hikes and has not been able to recoup $41 billion that it
provided to renewable generators since 2000. It has been a rude awakening for European countries that have ventured into
Protocol.

renewable markets. Lets take a look at a few country examples. Spain In order to enhance renewable energy sources in Spain, the
Government enacted legislation to reach 20 percent of electric production from these sources by 2010. To meet this target, the government
found it needed to provide incentives to ensure the market penetration of renewable energy including providing above market rates for

renewable-generated electricity and requiring that electric utility companies purchase all renewable energy produced. In 1994, Spain
implemented feed-in-tariffs to jump start its renewable industry by providing long-term contracts that pay the owners of renewable projects
above-market rates for the electricity produced. Because renewable technologies generally cost more than conventional fossil fuel
technologies, the government guaranteed that renewable firms would get a higher cost for their technologies. But, because the true costs of
renewable energy were never passed on to the consumers of electricity in Spain, the government needed to find a way to make renewable
power payments and electricity revenues meet. Since 2000, Spain provided renewable producers $41 billion more for their power than it
received from its consumers. In 2012, the discrepancy between utility payments to renewable power producers and the revenue they collected

5.6 billion Euros ($7.3 billion), despite the introduction of a 7 percent tax on generation.[i] The 2012 gap
represented a 46 percent increase over the previous years shortfall.[ii] This massive rate deficit should not come as a surprise. IER has
been warning of this problem for five years when Dr. Calzada released his paper on the situation in Spain and testified
before Congress. The Spanish government did not want to believe Dr. Calzada, but in the end they were hit in the face with reality. To
from customers was

recover those lost revenues from the extravagant subsidies, the Spanish government ended its feed-in-tariff program for renewables, which
paid the renewable owners an extremely high guaranteed price for their power as can be seen by the above deficit. Currently, renewable

7.4
percent return, after which renewable owners must sell their power at market rates. The measure is retroactive to when the renewable
power in Spain gets the market price plus a subsidy which the country deems more reasonable. Companies profits are capped at a

plant was first built.[iii] Therefore, some renewable plants, if they have already received the 7.4 percent return, are receiving only the market
price for their electricity. Further, wind projects built before 2005 will no longer receive any form of subsidy, and this affects more than a third
of Spains wind projects. As a consequence of the governments actions to rein in their subsidies and supports, Spains wind sector is
estimated to have laid off 20,000 workers and its solar sector, which once employed 60,000 workers, now employs just 5,000. In 2013, solar
investment in Spain dropped by 90 percent from its 2011 level of $10 billion. Spains 20 percent renewable energy share of generation from
wind and solar power has come at a very high cost to the nation. Germany In Germany, as part of the countrys Energiewende, or energy
transformation, electric utilities have been ordered to generate 35 percent of their electricity from renewable sources by 2020, 50 percent by
2030, 65 percent by 2040, and 80 percent by 2050. To encourage production of renewable energy, the German government instituted a feedin-tariff early, even before Spain.

In 1991, Germany established the Electricity Feed-in Law, which mandated

that electric utilities purchase electricity from renewable sources at above-market rates. A law passed in
2000 extended feed-in tariffs for another 20 years.[i] Originally, to allow for wind and solar generation technologies to mature into
competitive industries, Germany planned to extend the operating lives of its existing nuclear fleet by an average of 12 years. But, the
Fukushima nuclear accident in Japan changed Germanys plans and the country quickly shuttered 8 nuclear reactors and is phasing out the
other 9 reactors by 2022, leaving the countrys future electricity production mostly to renewable energy and coal.[ii] Coal consumption in

since 2008, and electricity from brown coal in 2013 reached the highest
level since 1990, when East Germanys Soviet-era coal plants began to be shut down. German electricity generation from coal increased
Germany in 2012 was the highest it has been

to compensate for the loss of the hastily shuttered nuclear facilities. Germany is now building new coal capacity at a rapid rate, approving 10
new coal plants to come on line within the next 2 years to deal with expensive natural gas generation and the high costs and unreliability of
renewable energy.[iii] As a result, carbon dioxide emissions are increasing. In 2012, for example, Germanys carbon dioxide emissions rose by

1.3 percent over 2011 levels.[iv] While the United States is using our low cost domestic natural gas to lower coal-fired generation, in
Germany, the cost of natural gas is high since it is purchased at rates competitive with oil. Germany has also enacted a moratorium on

Unfortunately, Germany has some of the

highest costs of electricity in Europe, making its consumers energy poor. In 2012, the average price of
electricity in Germany was 36.25 cents per kilowatt-hour,[i] compared to just 11.88 cents for U.S.
households, triple the U.S. average residential price.[ii] These prices led Germanys Energy Minister to
recently caution that they risk the deindustrialization of the economy. In addition to high electricity prices,
hydraulic fracturing, in response to opposition to the practice from its Green Party.

Germans are paying higher taxes to subsidize expensive green energy. The surcharge for Germanys Renewable Energy Levy that taxes
households to subsidize renewable energy production increased by 50 percent between 2012 and 2013 from 3.6 cents (4.97 U.S. cents) to
5.28 cents (6.7 cents) per kilowatt hour, costing a German family of four about 250 ($324) per year, including sales tax.[iii] The German

18 percent to 6.24 cents per kilowatt hour (8.61 U.S.

21.5 billion ($29.6
billion).[v] As a result, 80 German utilities are raising electricity rates by 4 percent, on average, in February, March, and April of this year. The
poor suffer disproportionately from higher energy costs because they spend a higher percentage of
their income on energy. As many as 800,000 Germans have had their power cut off because of an
inability to pay for rising energy costs, including 200,000 of Germanys long-term unemployed.[ vi]
government raised the surcharge again at the start of this year by

cents) representing about a fifth of residential utility bills,[iv] making the total feed-in tariff support for 2014 equal to

Germany knows reforms are necessary and two are being considered. On January 29, the German Cabinet backed a plan for new commercial
and industrial renewable power generators to pay a charge on the electricity they consume. As part of the reform of the Renewable Energy
Sources Act, the proposal would charge self generators 70 percent of the renewable subsidy surcharge, (i.e. the 6.24 cents per kilowatt hour).
Under the proposal, the first 10 megawatt hours would be exempt for owners of solar photovoltaic projects that are less than 10 kilowatts.
According to the German Solar Energy Industry Association, about 83 percent of solar self generators would be subject to the new charge. The
Cabinet is expected to sign the draft into law in April and will go to the Parliament for a vote in June. The German government is also

17 cents (23.47 U.S. cents) per kilowatt hour to 12 cents (16.56

U.S. cents) per kilowatt hour.[vii] United Kingdom The United Kingdom is targeting a 15 percent share of generation from renewable
considering a reduction in the feed-in tariff from the current average of

sources by 2020, up from 12 percent today. The increased renewable power will cost consumers 120 pounds a year (about $200) above their
current average energy bill of 1,420 pounds ($2,362). The UK is closing coal-fired plants to reduce carbon dioxide emissions in favor of

8.2 gigawatts of coal capacity were shuttered. Another 13 gigawatts are at risk of closing by
As an incentive, the UK government provided renewable
energy producers a guaranteed subsidy totaling twice the whole sale price of electricity, costing more
than 1 billion a year ($1.66 billion). Because these costs are placing U.K. households in energy
poverty, the government has a new proposal where renewable companies will have to sell their
electricity to the national grid under a competitive bidding system . The new proposal limits the total
amount of subsidies available for green energy, which were previously effectively limitless. The reduction in
renewable energy. In the past 15 months,

2019, according to the Confederation of U.K. Coal Producers.[viii]

subsidies has led to renewable developers scrapping plans amid claims that the proposal will make future renewable development
unprofitable.[ix] Italy Similar to Germany and Spain, Italy instituted a feed-in-tariff in the early 1990s to spur renewable
development[x], and also found it too costly. In 2012, the government charged all solar producers a five cent tax per kilowatt hour on all selfconsumed energy. The government also curtailed purchasing power from solar self generators when their output exceeded the amount the
system needed. Those provisions were followed in 2013 by the government instituting a Robin Hood tax of 10.5 percent to renewable
energy producers with more than 3 million ($4.14 million) in revenue and income greater than 300,000 ($414,000).[xi] According to Italys
solar industry, the result of these and other changes has been a surge in bankruptcies and a massive decrease in solar investment.
Conclusion Europe was quick to pursue compliance with the Kyoto Protocol by instituting a cap-and-trade system and mandating and
subsidizing renewable technologies in their power generation sector. However, these policies have left Europe with greenhouse gas emissions
higher than targeted, and either huge revenue losses or consumers in energy poverty due to incentives to promote renewable energy, such as
feed-in-tariffs. European governments are now slashing these incentives despite contracts that would otherwise continue them. The United
States should take a lesson from Europes experience, rather than calling for these policies to be established here, as some are doing.

Energy Prices
Energy prices soar lack of diversity leads to energy monopoly
Kammen 7 (Dan Kammen, director of the Renewable and Appropriate Energy Laboratory at the
University of California, Berkeley, scitizen, 1/16/07, http://scitizen.com/future-energies/diverserenewable-energy-sources-is-the-best-option_a-14-321.html, accessed 7/17/14)
Can you briefly introduce some options in terms of renewable energy sources? All of these have a lot of opportunity. Solar photovoltaic is one
of the most expensive of the renewables, about 25 cents per kilowatt hour. It doesn't have moving parts and can become part of buildings;
when it becomes a part of buildings, as we're starting to see in the U.S. and Germany, it can become a real large part of our supply. They work
in a simple way; it's just a semi-conductor and a piece of metal that conducts electricity and the sunlight moves the electrons around. We're
discovering how to make photovoltaics out of organic materials and plastic. These organic materials can repair themselves, so if they get
chipped or damaged, they can actually heal. Wind power is very exciting as well, we could generate very large amounts of energy from wind
power; the U.S. could be powered by the wind available in just some Midwestern states. China has a similar situation. Biofuels have all kinds of

Many of
these renewables have very large potentials. Would it be possible for different countries to specialize alternative energies,
opportunities, from making ethanol to burning the biofuel directly to run power plants, to gasifying it to make it into a natural gas.

depending on their respective needs and resources, in order to produce them locally? Certainly every country has different range of renewable

It would be a very unusual circumstance for a country to rely on one renewable

resource for power; although it may be very windy, providing an excellent wind source in the Midwest of
the U.S., Germany, and western China, you would not want the country to say, Im going to become
dependent on this energy source, even if its renewable and good for the environment. You want that
diversity b/c the ability for a group to manipulate prices is not a question of fossil fuel resources, but a
function of market power. What you want, ideally, is a good mix. Fortunately, the availability of renewable fuel sources tend to be
resources they could use.

available in different amounts, theres a good mix of all of them. Geothermal energy holds great potential as an energy source. What are some
methods through which we harness it? Why isnt it being implemented on a wider scale? I dont think its that great of a resource. In some
locations, it can do quite well; in California, they get 5% of their energy from geothermal power and New Zealand gets well over 50%. But
these are locations where you are near hot lava underground. The deep-drilling sort, the geothermal that everyone has, is the kind you need to
drill several miles underground to access it, where you essentially have a pipe that goes down to a hot rock. That is not an energy source from
which you can produce easy, large amounts of energy from. Its not likely to become a dominant source unless the technology for extracting
heat from underground becomes very very efficient. Its very likely to be one among the mix, but not a dominant one. The ones that have
shown so far, to be a large part of the mixes is solar, wind, biofuels, and the one that s just emerging now, and may become a significant
power, but of which we dont know yet, is tidal and wave power. Can we store solar energy? We can store it now, certainly. We can store it in
batteries, we can store it by pumping water uphill in places like California and Norway, who have networks of pumped hydro. The issue is
except for pumped storage of water, its expensive. The cost of the storage mechanisms, whether its batteries, fly wheels, or ultra capacitors,
the prices need to come down. In fact, they need to come down quite a bit. When you have a choice between producing a lot of energy and
storing it, if its storage isnt quite inexpensive, its better to have the ability to generate more. Whether its generating more with renewables;
for example, California has a very good wind source, but its on primarily at night. Storage needs to come down. When the price of batteries
comes down, a lot of interesting opportunities open up. We could run our vehicles the reverse of how we do it now; our vehicles could run
primarily off of a plug-in battery source and whats in your liquid gas tank acts a reserve, whether its ethanol or gasoline. This next generation
of plug-in hybrids are being talked about very seriously. There are plans to introduce large numbers of them to certain places, but that would
depend on battery prices coming down considerably. What is your opinion on the international ITER program, whose goal is to show that
energy production using atomic fusion is scientifically possible on fusion power? The ITER project is very important. Its a real shame that the
U.S. has dropped outnot because the other countries wont do a good job, but because one would like all the major countries to be players in
it. The ITER project really has the potential to move fusion along. Weve been under-investing in fusion for too long. If we properly invest in
fusion, we will no longer have this joke that fusion is 50 years away from being commercially ready and it has been like this for 50 years. This
is only true because we have been under-investing for 50 years. How available are these alternative energy sources to developing and/or poor
nations? Some of these countries are way ahead of us. A lot of these countries are only building their national grid systems now, because they
have a chance to do it right; they have less invested in the old way of doing things. In East Africa and in Kenya, more people get their
electricity from solar as new customers each year. More people, as a percentage of the population, get their energy from solar than any
country on Earth. There are places like that, like inner Mongolia, where more than half of the rural population gets its power from wind.
Renewables are actually ahead of where they are in developed countries by quite a bit. The issue is there is an overall lack of power in these
countries, so you need to build up the overall supply, but biofuels are available around the world. In fact, many poorer countries have better
solar and wind resources than others do. In your opinion, how long will developed nations take to make this transition to future energies?
Developed nations are moving too slowly. But I will say, a few leaders are doing it now: Germany and Japan have become remarkable leaders
in this. California, acting as its own country, is doing a significant job in changing things. Spain is becoming a big leader in wind power. Even
though things are moving slowly, they are moving. The real important thing is that we have the ability to build up from this.

Remixes

Nuke Tradeoff DA

Links
Renewables and nuclear energy are mutually exclusive paths. Jenkins 14:
Jenkins 14 [Jesse- graduate and researcher at M.I.T., he is a National Science Foundation Graduate
Research Fellow, along with being the Director of Energy and Climate Policy at Breakthrough Institute,
Can Nuclear Power and Renewable Energy Learn to Get Along?, TheEnergyCollective,
http://theenergycollective.com/jessejenkins/368706/can-nuclear-power-and-renewable-energy-learnget-along,7/17/2014]
Nuclear power and variable renewable energy sources like wind and solar power dont play well
together. Thats a commonly accepted nugget of wisdom these days. I heard the argument most recently during an interesting colloquy

on Twitter this week with Fresh Energy CEO Michael Noble, reporter Matthias Krause, and author and editor of Renewables International Craig

if we want to build an
ultra-low carbon electricity system to confront climate change, we may face two mutually exclusive
paths: one path dominated by nuclear energy (call it the French paradigm) and the other dominated by
variable renewables (call it the German paradigm). (In fact, supporters of the German Energiewende use this argument that
Morris. If true, the idea that renewables and nuclear dont mix has important implications. It would mean that

large penetrations of renewables are incompatible with nuclear as one of the justifications for the nuclear phase-out underway there now). The
more I think about this, however, the more Im convinced that the accepted wisdom that renewables and nuclear mix like oil and water is true
only up to a point. In fact, if we want to build an ultra-low carbon system powered by variable renewables, were going to have to solve
precisely the same technical challenges that will make a hybrid renewables and nuclear power system possible as well. My thinking is as
follows, and I present this as a hypothesis for discussion and with plans to analyze this in more detail in the future (i.e. using power systems
modeling) I begin with this basic point: In rough terms, once a variable source of renewable energy, such as wind or solar power, reaches an
energy penetration level (measured as the share of total energy supply) equal to that sources average capacity factor, aggregate output from
that variable renewable energy source will routinely fluctuate between 0 and 100 percent of total electricity demand. For example, if the
average capacity factor of solar photovoltaics is 10 percent (about what it is in Germany), once solar PV reaches about 10 percent of the
system-wide energy mix, solar output will vary from 100 percent of demand when producing at full capacity on a bright mid-summers day and
0 percent when night falls. Wind turbines in the breezy American Midwest have a capacity factor closer to 35-45 percent, so wind would reach
a ceiling at about 40 percent of energy share in that region. There are two important implications of reaching this point where a renewable
energy sources share equals its capacity factor .

First, without energy storage, high penetrations of renewables don't

leave much room in the power system for nuclear power plants (or any other baseload power plant). While
nuclear reactors can technically ramp or vary output up and down to follow loads (albeit less flexibly
than gas turbines), cycling or shutting down entirely and start up again later is too challenging for a
nuclear plant to do routinely. Yet at high penetrations of variable renewables, every other plant on the system would have to be
capable of routinely cycling on and off. Summary: its true then that absent energy storage and flexibility, high
penetrations of variable renewable energy sources doesnt play well with nuclear . Second, increasing
the penetration of renewables beyond the point where energy share equals capacity factor would mean
the renewable source would begin to regularly produce more electricity than demanded. Without
storage or energy sinks willing to buy up excess power, ren ewable generators would then have to
curtail a growing share of their output and waste any associated revenues . In practice, this ceiling could
actually be reached before renewable energy penetration equals capacity factor, as production would
begin to regularly exceed demand on high output/low demand days long before this point. In addition, if
renewables are exposed to wholesale prices (and not subsidized outside the wholesale market, i.e. with
feed-in tariffs), the market prices earned by renewables would be negatively correlated with their
output. Wholesale prices are lowest precisely when renewable generators are all cranking out power (again, this assumes no energy
storage/sinks.) At some point, adding more renewables just wouldnt be profitable any more. If renewables have to pay for the system
balancing services and flexibility needs they contribute to, this economic limit is reached even earlier. This point where energy share =

If solar capacity factors

typically range from 10-20 percent and wind from 25-45 percent, that makes it awfully hard to reach an
ultra low carbon energy system powered principally by renewables. Once these sources reach a
combined share of maybe 30-40 percent of the energy mix, technical and economic constraints will
make it very hard to increase their share further. Summary: absent energy storage and sinks that can
make profitable use of excess energy and massive system flexibility to handle variations in renewable
output from 0 to 100 percent of load, penetration of variable renewables is effectively constrained
below the point where their energy share equals their capacity factor.
capacity factor is probably a generous ceiling for renewable energy penetration absent storage then.

Renewable penetration destroys economic viability of nuclear plants

NEA 12 [Nuclear Energy Agency- specialized agency under the Organisation for Economic Co-

operation and Development (OECD), an intergovernmental organization of industrialized countries,

Nuclear Energy and Renewables: System Effects in Low-carbon Electricity Systems, http://www.oecdnea.org/ndd/reports/2012/system-effects-exec-sum.pdf, 7/17/2014]

This study focuses on the system effects of nuclear power and variable renewables, such as wind and solar, as their interaction is becoming

the integration of variable

renewables is a complex issue that profoundly affects the structure , financing and operational mode of
electricity systems in general and nuclear in particular . The present study, overseen by the Working Party on Nuclear
increasingly important in the decarbonising electricity systems of OECD countries. In particular,

Energy Economics (WPNE) of the OECD Nuclear Energy Agency (NEA), presents an overview of the most important system effects, proposes

The introduction of significant amounts of

variable renewables generates a number of hitherto unaccounted for impacts that are composed inter
alia of the increased costs for transport and distribution grids, short-term balancing and long-term
adequacy. The deployment of electricity from variable renewables is also significantly affecting the
economics of dispatchable power generation technologies, in particular those of nuclear power, both in the short and
the long run. In the short run, with the current structure of the power generation mix remaining in
place, all dispatchable technologies, nuclear, coal and gas, will suffer due to lower average electricity prices and
reduced load factors. Due to its relatively low variable costs, existing nuclear power plants will do better than gas and coal plants,
which are already substantially affected in some countries. In the long run, however, high-fixed cost technologies such as nuclear will
be affected disproportionately by the increased difficulties in financing further investments in volatile
low-price environments.The outcome of these competing factors will depend on the amount of variable
renewables being introduced, local conditions and the level of carbon prices. The latter are particularly important.
While nuclear power has some system costs of its own, it remains the only major dispatchable lowcarbon source of electricity, other than hydropower which is in limited supply. Carbon prices will thus be an
methodologies to assess them and provides systematic empirical cost estimates.

increasingly important tool to differentiate between low-carbon and high-carbon dispatchable technologies.

Increase in renewables subsidies forces shut down of nuclear plants

Banks 13 [David policy advisor to Heartland and Director of D.C. Operations for the Alliance of
Wise Energy Decisions, The Unintended Consequences of Energy Mandates and Subsidies on
Americas Civil Nuclear Fleet, The Heartlander,
http://news.heartland.org/editorial/2013/05/13/unintended-consequences-energy-mandates-andsubsidies-americas-civil-nuclear-fl?quicktabs_4=0,7/17/2014]
Today, more and more observers are focused on the likelihood of an early shutdown of existing reactors
due to a combination of market forces and distortions created by government intervention . According to
market observers, 5 or 6 of the nations 103 operating reactors could be at risk of early retirement over the next several years. Indeed, as
many as a quarter of civil nuclear power facilities are currently cash-flow negative or at risk of
becoming so. Most related commentary emphasizes the impact of abundant, cheap shale gas on the economic viability of reactors
particularly smaller units located in competitive state electricity markets . A growing number of analytical reports, however,
also point to the negative impact of renewable energy mandates and subsidies (direct and indirect) on
the competitiveness of nuclear power. Today, 30 states and the District of Columbia have renewable portfolio standards (RPS) or

other mandated renewable capacity policies, according to the Energy Information Agency. Most of these policies were enacted before the shale

As renewable targets
ramp up in the coming years, we believe that reactors located within RPS states will come under
increasing pressure, causing a number of them to shut down. The early retirement of those reactors would have a
gas revolution and the Environmental Protection Agencys increased regulation of coal-fired power generation.

substantial impact on the local economy. A job at a U.S. nuclear facility pays nearly 40 percent more than the average local salary, and the
average plant generates close to $500 million a year in total output for the community in which it is located. Moreover, a shutdown of a
number of reactors would cumulatively affect university physics and engineering programs, material science laboratories, manufacturers, and
the defense establishmentincluding the U.S. Navys ability to recruit personnel to help operate its nuclear carriers and submarines. Certainly,
with fewer employment opportunities available on separation from military life, recruits would be discouraged from seeking military work in a
nuclear-related function. We recognize the benefits of lower cost energy to manufacturers and consumers. From an economic and national
security perspective, there is no question, for example, that shale gas has greatly benefited the nation. However, the Nuclear Energy Program
at CSIS plans to work with interested stakeholders to help educate the public and the policymaking community on the unintended
consequences of subsidized generation on Americas civil nuclear fleeteffects that are not generally well understood or appreciated. In
particular, we wish to examine the impacts of renewable tax credits at the federal level and renewable portfolio and efficiency mandates, as
well as subsidized gas plants at the state level. Given the indispensable role civil nuclear power plays in promoting U.S. national security
interests and achieving air quality standards, we believe that there is a critical need for a more comprehensive, integrated discussion on
stationary power issues, particularly as federal and state governments look to increase the share of renewable sources in the electricity mix.
The Wind Production Tax Credit: An Example of Unintended Consequences Recent studies examining the impact of renewable energy policies
point to their disruptive impact on competitive electricity markets, including the operation of nuclear plants located in those areas. The wind
production tax credit (PTC) of $23 per MWh has been the focus of much of this research because of its link to negative pricing for electricity
(i.e., when power providers must pay congestion charges to the grid to take their electricity). Over the past decade, wind facilities have
increased 10-fold to over 60 GWthanks mostly to state renewable requirements and the wind PTC, which incents wind farms to produce
electricity regardless of market demand, oftentimes during the late night and early morning when demand for electricity is at its lowest.
Because wind generators are rewarded the tax credit, they are willing to pay congestion charges to the grid as long as those charges do not
exceed the credit, thus guaranteeing them a profit. Negative pricing has grown from a very low occurrence before the introduction of
renewable mandates to much higher levels, accounting for up to 13 percent of all hourly prices in some U.S. regions. Those numbers increase
drastically in hours in which the wind blows more often. Non-wind generators do not receive the tax credit. Consequently, other power sources,

Nuclear reactors, which attempt to

run at a set level of output for technical, safety, and cost recovery reasons, are hit hard by the increased cost of operation.
Industry forecasts suggest that nuclear facilities will be forced to pay hundreds of millions of dollars in
including nuclear facilities, must pay the congestion charge without the corresponding tax benefit.

extra costs over the coming years because of negative pricing resulting from renewable policies . These
costs will clearly increase as renewable energy targets ramp up in many states between now and 2025. We are already seeing these impacts
play out in several regions. The shutdown of the Kewaunee nuclear plant in Wisconsin, for example, was blamed on low natural gas prices and
large volumes of new wind generation. And in Texas, Public Utility Commission chairman Donna Nelson testified at a state Senate Natural
Resources hearing last September that the market distortions caused by renewable energy incentives are one of the primary causes I believe
of our current resource adequacy issue[T]his distortion makes it difficult for other generation types to recover their cost and discourages
investment in new generation. Exelon chief Christopher Crane went even further, warning the press earlier this year that there is a very high
probability that existing safe, reliable nuclear plants will no longer be competitive and will have to be retired early if the PTC remains in place.

analysts cautioned that high-fixedcost technologies, such as nuclear, will leave the market due to their load and profitability loss resulting
from increased penetration of wind power. Because of the departure of these despatchable sources from the grid, the volatility
In a recent report by the Organization for Economic Cooperation and Development (OECD),

of electricity prices will increase substantially. OECD thus suggests that policymakers swiftly work to address this growing challenge by

Given the fact that roughly

half of the nations nuclear fleet is located in competitive electricity markets that also have renewable
portfolio standards and other energy mandates and subsidies, we are clearly concerned about the
future competitiveness of our nuclear units , which already face rising maintenance and fuel costs. Moreover, we anticipate
educating the public on the need to protect electricity supply security. We agree with this assessment.

greater deployment of wind installations because of the extension of the PTC, which was a component of Januarys deficit deal. In addition,
President Obama has suggested making the wind PTC permanent starting in 2014. Although most observers doubt the political viability of such
a proposal, it remains unclear how long the production tax credit will remain in place.

Wind subsidies directly trade off with nuclear and cause collapse of industry
Banks 13 [George David- senior fellow and deputy director of the Nuclear Energy Program at the
Center for Strategic and International Studies (CSIS),he was Republican deputy staff director of the
Senate Environment and Public Works (EPW) Committee, Market Distorting Policies Will Lead to U.S.
Nuclear Reactor Shutdowns, Center for Strategic and International Studies,
http://csis.org/publication/market-distorting-policies-will-lead-us-nuclear-reactor-shutdowns, 7/17/2014]
We are particularly concerned about developments in competitive electricity markets. Currently, about half of the nuclear fleet is located in
those areaswith the other half in regulated markets. All competitive markets have renewable portfolio standards (RPS) with targets varying
from state to state but, in general, ramp up over time between now and 2025. In addition, many of these markets have energy efficiency
mandates that result in demand destruction for electricity, as well as state subsidies for other generation sources, including natural gas.

significant growth in the penetration of renewables, which

will artificially drive electricity prices in competitive markets equal to or below zero for an increasing number of hours.
According to a 2012 report from the Organization for Economic Cooperation and Development (OECD),
with 10 percent penetration of wind power, nuclear operators will suffer a 4 percent loss in load and a
24 percent loss in profitability; those numbers worsen considerably for nuclear power when 30 percent
of electricity is generated by winda 20 percent loss in load and 55 percent loss in profitability. In
response to worsening economics of operating nuclear plants in competitive markets, we expect
utilities to shut down some reactors before their license expiration, reducing availability of dispatchable
capacity that can cover demand when renewable generation is not producing electricity. The departure of this
Because of continued subsidies and mandates, we expect

baseload from the grid will bring greater transparency to the true system costs of renewablesthe need for backup, a cost that is often not
included because of the general assumption that sufficient backup generation already exists. Accordingly, we see intervention by state
officials to force some nuclear plants to stay on the grid as must run generation, rather than roll back subsidies and mandates for other
power sources. In practice, the markets in those states will therefore become more regulated, which could benefit the continued operation of
some nuclear plants, albeit at a greater cost for consumers. In our opinion, this action could preserve roughly an additional 10 to 15 GWe of
nuclear power in the Northeast and other competitive markets. However, we cannot rule out the impact of local political opposition to the
continued operation of those reactorsa dynamic that could overwhelm the pragmatic necessity to run them. Under this scenario, we expect
some fossil-fuel power plants to remain in operation as must runs to maintain security of electricity supply, despite their greenhouse gas

We also recognize that the existence of the decommissioning fund for reactors that are losing
money could incentivize some operators to shut down units permanently to improve the companys cash balance.
emissions.

Certainly, decommissioning would reduce costs in the short run and could potentially generate cash in some cases; operators are not required
to return retired reactors to greenfield status until 60 years from the date of decommissioning. This type of incentive does not exist with
other forms of power generation. As a point of reference, the Kewaunee decommissioning fund had more than $500 million when the plant was
closed. The wild card in our analysis is the state of political affairs in competitive markets. In the near term, we believe that most state
legislatures will maintain or increase subsidies and mandates for renewables, despite attempts by some legislators and free market groups to
repeal them. However, we acknowledge that a number of renewable portfolio standards may be softened by broadening out qualifying sources
(but not likely nuclear) or by lengthening compliance periods. In most cases, the structure of those subsidies and mandates for renewables
deters substantial private-sector investment in storage technology, because operators will continue to be paid for power generated, regardless
of market demand or associated system costs. Consequently, we are bearish on the prospects for renewables transitioning from their current

Most power produced from renewables in the United States will

therefore remain dependent on subsidies and mandates, maintaining an artificial market that is at
substantial risk of failure if and when government policies shift. In our evolving analysis, we are also watching events
status as intermittent generation to baseload.

unfold in Europe, where artificial markets for renewables are collapsing (e.g., Spain) and major utilities are shutting down baseload generation
because of subsidies and preferences for wind and solar power. Most of the threatened generation is natural gasfired because the price of
that feedstock is not competitive in todays market, but German industry sources have warned that nuclear reactors could face early

shutting down baseload power plants was

unavoidable if government renewable policies and regulation persist. Chancellor Angela Merkel of Germany has
retirement as well. E.ONs CEO Johannes Teyssen recently warned that

acknowledged that the growth in renewables

scale-back in related subsidies if she is reelected.

has resulted in huge problems for the system and has pledged a

Impacts
Crashing the nuclear industry means that nuclear companies cant properly
decommission reactors plants become fuel rod time bombs. Steady industry
is key to safe decommissioning
Wald 12 Pulitzer Prize winning journalist, B.A. in urban studies from Brown University
http://www.nytimes.com/2012/03/21/science/earth/as-nuclear-reactors-age-funds-to-close-themlag.html?pagewanted=all&_r=0
The operators of 20 of the nations aging nuclear reactors, including some whose
licenses expire soon, have not saved nearly enough money for prompt and proper
dismantling. If it turns out that they must close, the owners intend to let them sit like industrial relics for 20
to 60 years or even longer while interest accrues in the reactors retirement accounts. Decommissioning a
reactor is a painstaking and expensive process that involves taking down huge structures and transporting the
radioactive materials to the few sites around the country that can bury them. The cost is projected at $400 million to
$1 billion per reactor, which in some cases is more than what it cost to build the plants in the 1960s and 70s. Mothballing
the plants makes hundreds of acres of prime industrial land unavailable for decades and leaves open the possibility
that radioactive contamination in the structures could spread . While the radioactivity levels decline over
WASHINGTON

time, many communities worry about safe oversight. Bills that once seemed far into the future may be coming due. The license for Vermont
Yankee in Vernon, Vt., at 40 the nations oldest reactor, expires on Wednesday, for example. And while the Nuclear Regulatory Commission has
granted its owner, Entergy, a new 20-year permit, the State of Vermont is trying to close the plant. In New York, Gov. Andrew M. Cuomo has
vowed to force the two operating reactors at another Entergy plant, Indian Point, 35 miles north of Midtown Manhattan, to shut down when
their licenses expire in 2013 and 2015 by denying them state environmental permits. Entergy is at least $90 million short of the projected
$560 million cost of dismantling Vermont Yankee;

the company is at least $500 million short of the $1.5 billion

estimated cost of dismantling Indian Point 2 and 3. The shortfall raises the possibility that Vermont could tend one sleeping reactor for
decades while New York oversees three; Unit 1 , another reactor at Indian Point, shut down in 1974 and has yet to be dismantled. Even the
Nuclear Regulatory Commissions chairman is uneasy about the prospect of a 60-year wait. These facilities should be cleaned up, and their
footprints reduced as much as possible so that these areas can be returned to other productive uses within the community, the chairman,
Gregory B. Jaczko, said recently. Gil C. Quiniones, the president and chief executive of the New York Power Authority, a state utility that sold
Indian Point 3 to Entergy in 2000, called Entergys failure to plan for or finance the decommissioning of Indian Point in real time stunningly
irresponsible. Delaying action for 60 years when Entergy might no longer even exist is offensive to the communities of Westchester
County and the people of New York, he said. James Steets, a spokesman for Entergy, said that financing would not be a problem because the
company still expects to obtain new 20-year licenses for Units 2 and 3, which would allow time for savings to grow, and to prevail on the state
permit issue. Assuming that the plants remain open for two more decades, the company has promised Westchester County that it will
decommission Indian Point in a reasonable period of time after the reactors close, probably in the 2030s. Of the 20 reactors that lack the
money for swift deconstruction, the owners hope that license renewals from the Nuclear Regulatory Commission will make the problem go
away. For the plants that are fighting with their host states, Indian Point and Vermont Yankee, the federal courts may have the final say on
whether and how long they keep operating. (A large demonstration in favor of closing the plant is planned for Wednesday at Vermont Yankee.)

The remaining 84 active reactors have enough savings on hand to satisfy the commissions minimum
financing requirements for eventual dismantling, some of them because they won license extensions . The nuclear
industry had been counting on steady returns on the funds and did not anticipate the 2008
market crash. Altogether the nations 104 power reactors have about $40 billion on hand. A lot of decommissioning funds
did take a hit at the nadir of the economic crisis, said Scott Burnell, a spokesman for the regulatory commission. One plant,
Palisades in western Michigan, had $597.6 million saved up at the end of 2006, but the account was
down to $218.8 million two years later and was only $279.2 million by the end of 2010, the most recent figures show.

Bruce Biewald, an economist who specializes in electricity economics at Synapse Energy, a Boston consulting firm, said the mothball strategy
carries risks that could outweigh benefits. Proponents say its like magic compound interest on the one hand and radioactive decay on the
other, he said. (Because radioactivity levels decline over time, deconstruction workers would ultimately be exposed to less contamination.)
But future investment returns could prove bleak, Mr. Biewald warns, and anticipated deconstruction costs could easily rise. Responding to a
petition from Sherwood Martinelli, an antinuclear activist who lives near Indian Point, Dr. Jaczko, the regulatory commission chairman, sought a
shorter period between closing and dismantling. But in October, Dr. Jaczko was outvoted 4 to 1 by his fellow commissioners. And the
commissions staff said that even 60 years was not a hard-and-fast outer time limit for suspending a reactors operations. In the industry, this
status is known as Safstor and it usually involves putting the spent nuclear fuel into storage casks on site, draining many of the plants fluids,
making security arrangements and maintaining the reactor so it looks like a decent neighbor. Environmental experts say

the plants can

be dangerous when they are not running. In a letter, the three members of Vermonts Congressional delegation pointed
out that 55,000 gallons of contaminated water spilled out of a mothballed plant in Illinois after a
pipe froze. An attentive night watchman was credited with catching the spill in time to contain it. Indian Point 1 has leaked a
variety of radioactive materials into the soil on the banks of the Hudson in the 38 years since it closed,
a point acknowledged by Entergy, which responded by emptying a spent fuel pool that was the source of the problem. The environmental
group Riverkeeper argues that this is a harbinger of further trouble if Units 2 and 3 enter Safstor. Compounding the worries about radioactive
materials, the nation still lacks a permanent repository for spent nuclear fuel after decades of jockeying by politicians who sought to bar it
from their backyards. So

the fuel at the sleeping reactors will remain on site .

Decommissioned reactors have increased rick of zirconium fires destroys

economy and risks extinction
Alvarez 2 Senior Scholar, Institute for Policy Studies, award winning science author,
http://www.nirs.org/radwaste/atreactorstorage/alvarezarticle2002.pdf
If a fire were to break out at the Millstone Reactor Unit 3 spent fuel pond in Connecticut, it would result in a
three-fold increase in background exposures. This level triggers the NRCs evacuation requirement, and could render about 29,000
square miles of land uninhabitable, according to Thompson. Connecticut covers only about 5,000 square miles; an
accident at Millstone could

severely affect Long Island and even New York City.

A 1997 report for the NRC by Brookhaven National

a severe pool fire could render about 188 square miles uninhabitable, cause as many as 28,000
cancer fatalities, and cost $59 billion in damage. (The Brookhaven study relied on a different standard of
uninhabitability than Thompson.) While estimates vary, the use of a little imagination, says Thompson, shows that a pool fire
would be a regional and national disaster of historic proportions. Several events could
cause a loss of pool water, including leakage, evaporation, siphoning, pumping, aircraft
impact, earthquake, accidental or deliberate drop of a fuel transport cask, reactor failure, or an
explosion inside or outside the pool building. Industry officials maintain that personnel would have sufficient time to provide an
Laboratory also found that

alternative cooling system before the spent fuel caught fire. But if the water level dropped to just a few feet above the spent fuel, the
radiation doses in the pool building would be lethal. The procedures fuel handlers need to follow to recognize problems, repair heavily
damaged equipment, and command off-site resources have yet to be formalized, much less tested. But if routine operations are any
indication, not all reactors would pass muster: By the NRCs own admission, significant temperature rises in fuel ponds have gone undetected
for days. Old policy, older problems Over the years, Thompsons persistence has paid off, and the NRC has grudgingly made important
concessions. For 20 years, the NRC assumed that aged spent fuel, which has had several years for radioactive isotopes to decay, was at little

the NRC
conceded that the possibility of a zirconium fire cannot be dismissed even many years after a final
reactor shutdown. Equipment installed to make high-density ponds safe actually
exacerbates the fire danger, particularly with aged spent fuel. In high-density pools at pressurized water reactors, fuel
risk of catching fire. But in an October 2000 study of spent

fuel risks at sites where reactors were being decommissioned,

assemblies are packed about nine to 10.5 inches apartslightly more than the spacing inside a reactor. To compensate for the increased
risk of criticality, pools have been retrofitted with enhanced water chemistry controls and neutron-absorbing panels between assemblies. The
extra equipment restricts water and air circulation, creating vulnerability to systemic failures. If the equipment collapses or fails, as might
occur during a terrorist attack, for example, air and water flow to exposed fuel assemblies would be obstructed, causing a fire, according to
the NRCs report. Heat would turn the remaining water into steam, which would interact with the zirconium, making the problem worse by

the NRC concluded that it is not feasible, without numerous

to define a generic decay heat level (and therefore decay time) beyond which a zirconium fire is not
physically possible.
yielding

flammable and explosive hydrogen. As a result,

constraints,