“Today, many governments give special treatment to a favored few businesses that eagerly accept those favors. This is the essence of cronyism…. One obvious example of this involves wind farms. Most cannot turn a profit without the costly subsidies the government provides.”
– Charles G. Koch, “The Importance of Economic Freedom.” August 17, 2012.
Classical-liberal entrepreneur Charles Koch, CEO of Koch Industries, Inc., valued at $100 billion, is one of the most intellectual business leaders in the United States, if not the world. He also takes the prize as the most trenchant critic of cronyism (rent-seeking) where business representatives lobby for special government favor.
Charles Koch’s views are based on his extensive study of the theory and practice of social cooperation for mutual gain–and prosperous societies. His verdict for private property, free markets, and the rule of law–and against government intervention–is long held.
This post reproduces a front-page story in the New York Times business section that excitedly reported a breakthrough with solar energy as represented by a heady energy company named Enron. Formed in the mid-1980s, Enron had just entered into the solar business and was destined to revitalize–if not save–the U.S. wind industry just a few years later.
Good press, for a half century now, has created an Enron-like illusion of the coming competitiveness and profitability of solar and wind energies for on-grid electricity. Basic energy physics explains why the sun’s (dilute) flow cannot compete against the sun’s stored (dense) energy embedded in natural gas, coal, and oil.
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…“Federal officials, aware that solar power breakthroughs have shined and faded almost as often as the sun, say the Enron project could introduce commercially competitive technology without expensive Government aid.”
“The range of energy possibilities grouped under the heading ‘solar’ could meet one-fifth of U.S. energy needs within two decades.”
– Robert Stobaugh and Daniel Yergin, “The End of Easy Oil,” in Stobaugh and Yergin, eds., Energy Future, Report of the Energy Project of the Harvard Business School (New York: Random House, 1979), p. 12.
”I think … the consensus … is after the year 2000, somewhere between 10 and 20 percent of our energy could come from solar technologies, quite easily.”
– Scott Sklar, Solar Energy Industries Association (1987).
“Before maybe the end of this decade, I see wind and solar being cost-competitive without subsidy with new fossil fuel.”
– DOE Secretary Stephan Chu, Address to Pew Charitable Trusts, March 23, 2011.
Yesterday’s Part I on the long history of solar power ended with two quotations from energy historian Wilson Clark in his 1974 book, Energy for Survival: The Alternative to Extinction:
…“In 1908, [Frank] Shuman formed the Sun Power Company and convinced English financiers to back his efforts to build larger plants using the flat-plate collectors.