Governments have convinced us that the switch to renewable energy is imminent and cheap. Endless promotions, rebates, and incentives to reduce carbon footprints are part of daily life. It makes children happy, because they’re learning that climate change is more dangerous than a cornered badger. But at some point, reality rains on the parade when a simple question is posed: who’s going to pay for all this?
We’re starting to find out. Case in point is the latest phenomena of British electric motorists getting a splash of cold water (other than from the sky) as they pull up to the…electrical outlet. Ecotricity, Britain’s “leading green energy supplier” has built a network of vehicle charging stations across the Euro-rejecting countryside that enable travel from one end to the other with free electricity. This is helpful, but also addictive, which I suppose is the point.
However the electricity that has been free for 5 years will now cost 6 pounds per half hour of charging which is somewhere between 2 and 200 dollars, depending on where Brexit-addled currency traders take the pound next.
That’s a cold welcome to reality for a poor Brit standing in the pouring rain on the side of the motorway with his charging cord in hand. His situation is not helped either by the realization that Scots, Welsh, and Irishmen now constitute his entire and belligerent band of trading partners. Electricity subsidies as part of the Euro economy are one thing (unsustainable as that is), but are quite another when the only trading help comes from other parts of the economically challenged (to put it mildly) island.
Tesla, the electric car manufacturer, is changing course as well. Tesla has, until now, provided free electricity for its cars at its super charging stations, but won’t for the upcoming mass-produced models. This isn’t knocking Tesla, which has done an admirable job of advancing green technology through brilliant products and marketing. Charging for free at Tesla stations was a brilliant strategy that worked as long as relatively few of its cars were on the road. But that plan has ended for Model 3 purchasers, whenever they get their cars, because there will be far too many of them.
Tesla can see that there will be a substantial cost associated with powering 400,000+ Model 3’s for free through the supercharger stations, which is a different beast than the relatively meager sales of the more expensive models. Tesla and private companies like Ecotricity realize that as electric vehicle usage increases beyond a fringe hobby, it can’t be a freebie anymore for any business that wants to survive, a lesson governments have yet to learn.
A particularly expensive and dumb program is the widespread electric car rebate scheme. The scheme involves governments in Europe and North America handing out fat subsidies to purchasers of electric cars, or partially electric cars, and pulling money from lord knows what other budget in order to put fat middle class bums into Teslas and hybrid Volvos. The incentives make little sense in absolute terms, because they’re not designed to promote absolute efficiency.
They encourage people to continue with whatever luxury they currently wallow in in fat overburdened luxury vehicles. And this is accomplished by offering car-buyers grants to switch to hybrid versions that increase mileage by 20 percent, rather then encouraging them into small sensible vehicles like Honda Civics. A Honda Civic, keep in mind, costs a fraction of electrics while still getting excellent mileage.
It is astonishing to see governments with insurmountable debt handing out thousands of dollars to consumers for the simple reason that they purchased a green car. It’s not peanuts either. Governments used to hand out what seemed like large subsidies for home renovations that saved power; now governments hand out loony sums like $13,000 in Ontario for purchasing an electric car.
The overwhelming joy of the transaction may be somewhat tempered by the simultaneous commissioning of new coal-fired plants in China, one of which – and there are many – would offset the benefits of the entire Ontario government’s massive program (or California’s, etc.), but I digress.
Around the world, governments are on the edge of imploding from excessive debt. Frivolous subsidies are a luxury few can afford, especially when they are near pointless – spending hundreds of millions to help people buy electric cars in California doesn’t begin to offset new garbage being added to the environment daily from China’s ever growing fleet of coal fired power plants, among (many other) things.
The shift to greener transportation will happen as it should, with or without subsidies, when the price of oil rises to a level that makes it economical again.
Read more insightful analysis from Terry Etam here