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The uncover truth of green energy

The uncover truth of green energy
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Álvaro Martín

Álvaro Martín

Estudiante de economía internacional. Defensor del libre mercado desde que tengo uso de razón. Una sola frase para cambiar el mundo: "Laissez faire". Autor de "IN DEFENSE OF FREEDOM", prologado por Daniel Lacalle, a la venta en Amazon y en la tienda online del Club de los Viernes.
Álvaro Martín

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About green energy

Last week I had a conversation with a friend, who, with motive of the “Earth day” was arguing and moaning against all types of fossil fuels and its harmful effects on the planet.

In addition to have invented all the data he was exposing, one thing called my attention even more, and certainly made me laugh: he shouted that one day the oil peak will end, and that day we will all blame ourselves for not having cared enough about “green energy”.

I responded him, that if the oil peak was true, and in fact not a myth invented by ecologists, it would be a larger peak than the Himalaya itself, because we have been warned of the oil peak since the 1950´s, and oil was first expected to be ended by 2010, following the predictions of ecologists at the time…

The best was when he mentioned that governments, and specially the Spanish one, hadn’t supported the renewable energies industry enough! Truth is that some 12,000 million euro were granted in subsidies; the greatest missed investment from the government in the last few decades.

Because we can’t be defending and covering certain companies, keeping their benefits hold as they were precious jewels to later on chill the very narrow of our bones, when our electricity tariff shoots up by more than 35% in a month!

Pure taxes

And most important of all, we, all consumers should be aware that 52% of the total tariff we are paying every month are pure taxes… just try it one day, when you turn on the light look at the lamp firmly, I assure you that you’ll be able to see Montoro’s face on it!

But don’t just blame the Spanish government for the fiscal pillaging and disastrous management, because the US did as well, or as bad, exactly the same.

In the 15-year period after 1994, the US government provided oil and gas industries a total amount of subsidies of more than 446 billion dollars, of which nearly 10 billion were giving to renewable energy.

You might think that’s not much, but remember that this was before the real party started in 2009, for when until nowadays, renewable have received the fresh amount of 185 billion dollars.

Good and exemplified companies are never dependent on subsidies as they have succeeded due to an efficient business model in a competitive environment.

Lazy and low profiting firms tend to require subsidies for their internal growth, which is hardly ever reflected into the market.

Products don’t need to be magic, as if they are well designed or useful and at reasonable price they’ll always overlap competitors and attract consumers’ demand.

One of the most intervened

The energy sector has been historically one of the most intervened due to their of energetic scarcity and leaving aside the poor, but let me tell you that this feelings come from previous examples of occurrence in intervened systems, always intervened.

Real profit margins in a competitive industry might be lower, but overall revenues will be much higher, as if many companies are competing for a certain group of costumers on an inelastic product; as electricity is, the one with the best Value For Money (VMF), offering better prices will certainly succeed, creating a turndown effect on prices due to innovation into competition, where the most benefited ones will be consumers and later on enterprises, leaving aside the government.

It’s and has always been deeply dangerous governmental investment in companies directly, as administrations have always manipulated and dominated several enterprises from the shadow to later on cripple them down, or if not, why are there several politicians with no idea about energy, seated at the right of the main energy CEOs in Spain?

In Spain, our renewable energy market is clearly strong, and consumers are willing to see prices decrease to shift their demand towards this new non- pollutant industry and leave aside the typical oil companies they’ve always depended on.

Technology and Globalization

Technology should be therefore used in search of a cleaner and safer planet, through innovation in search of efficiency in renewable energy generation, looking always forwards to reduce costs.

Globalization has minimized prices and increased profit margins all over the world, so just taking the energetic industry out of hands of politicians and giving its lead to an open, free and global market will be the solution for an efficient and clean energetic future.

But for that first of all we should end up with subsidies to renewable, but not just to renewable, and to coal, to carbon, to oil, to gas, to methane, to coke, to kerosene… in definitive, we; the market should kill subsidies and governmental perpetuation.

As Michael Pollan; am American author puts it:

“The correlation between poverty and obesity can be traced to agricultural policies and subsidies.”

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