More Signs That Illinois’ Green “Industrial Policy” Is Failing
Whodathunkit? Taxpayer assistance to relieve the pain of government failure…
On Wednesday, Gov. JB Pritzker proudly announced a whopping $300 million of cash assistance for Illinoisans struggling with energy bills. “Every Illinoisan deserves access to reliable energy—regardless of their economic status,” Pritzker said in his press release.
That’s just the latest result of Illinois’ foundering energy policy but, first, note that the new program is for natural gas, propane and electricity (only about 10% of which is from renewable projects). Those are the very energy sources that Illinois is in the process of deliberately trying to destroy.
Illinois plans to have 50% of its electricity production from renewable sources by 2040 and 100% from clean energy sources by 2050. That’s under CEJA (Illinois’ Climate and Equitable Jobs Act), which became law last year and was correctly called by one of its sponsors “the most aggressive, most progressive climate bill in the nation.”
It’s all part of what two leading supporters openly call an “industrial policy.” That was in a Chicago Tribune op-ed last week by Kady McFadden, a former deputy director at Sierra Club “whose work was instrumental in passing” CEJA, and Ameya Pawar, a former Chicago alderman who was also active in forming Illinois’ energy policy.
The first “case in point” of what they call in their column a “thoughtful industrial policy” is the financial support Illinois taxpayers are providing to Illinois electric vehicle makers. Illinois last year set out to become the national leader in electric vehicles and their batteries with its Reimagining Electric Vehicles Act.
But reimagine this: The plan is failing.
Details are in a Crain’s report last week. “Pritzker’s vision of Illinois as an electric vehicle production hub is in danger of becoming a pipe dream,” Crain’s says. “Illinois still hasn’t landed a factory that produces the most valuable component of electric vehicles—the batteries that make them go.” Illinois is 0 for 18 in the competition for battery plants.
Crain’s identified another problem discouraging manufacturers of anything – not just EVs – from coming to Illinois: CEJA “is expected to drive up electricity costs, a major expense for manufacturers.” Historically, Illinois had comparatively inexpensive electricity thanks to market-based competition for the best sources. But policy now favoring more expensive renewable sources is turning into another disadvantage in the competition for investment and jobs.
Illinois consumers are already getting slammed. Roughly the southern two-thirds of Illinois has is seeing a 50% jump in electricity cost and is at “severe risk” of brownouts.
Defenders of CEJA are often saying that it isn’t to blame for rising costs. CEJA, they note, only became law last year and the shutdown of coal plants, which is causing much of the problem, was announced earlier.
That’s hardly convincing. Pritzker and the General Assembly put a target on the back of all fossil fuel plants long ago. He campaigned on a goal of 100% renewables and made it a priority upon taking office over three years ago. Even then, legislation had already set the impossible goal of 25% renewables by 2025. That goal was clearly an illusion and won’t be met.
On a more fundamental level, this isn’t complicated. Illinois simply does not have adequate capacity to deliver electricity reliably at a good price. Higher prices and brownout risk prove that. The government simply blew it with policies that we now know did not match capacity with demand.
The most frightening, new warnings of the consequences of naively aggressive green energy policy are from California and Europe.
California, which is right up with Illinois in green ambitions, this week issued an energy conservation emergency alert and is asking consumers to avoid charging EVs.
Most of Europe is in crisis. Companies large and small are cutting back or closing entirely due to high energy prices. People are hoarding firewood. The continent faces a true catastrophe this winter. Their problem is mostly caused by foolish reliance on natural gas from Russia, but green overoptimism has contributed.
Illinois’ energy policy still includes a complete moratorium on new nuclear plants, even though nuclear is making a “remarkable comeback” elsewhere in the world, as described here. Even climate alarmist National Public Radio reports that environmentalists are now embracing nuclear energy.
Such is Illinois’ “industrial policy” that its architects are so proud of.
You’d think they’d have chosen a better term. Even to those of us who aren’t free market purists, “industrial policy” has very derogatory connotations, and rightfully so. It means central planning and statism, which typically fail because the government is particularly bad at picking winners and losers or looking into the future. It’s better to let the private sector take the losses gambling on that, as some of us see things, and the private sector is more likely to get it right.
Industrial policies are also prone to the politics of the day. So it was with CEJA, which is jam-packed with social justice goals. In CEJA’s 956 pages, “equity” appears 114 times and “environmental justice” appears 86 times. It amounts to micro-management of Illinois’ energy sector by bureaucrats.
All that costs money. Lots of it. The total cost of CEJA has been estimated at more than $800 million annually plus another $1.2 billion annually in higher electricity rates. Estimates, however, vary widely, and nobody truly knows the full cost.
The lesson Illinois is learning is not that renewable energy sources have no place in a long-term solution. They do. It’s just that they aren’t remotely close to being ready enough, and the consequences of pretending otherwise are materializing faster than anybody expected.
“We will sell no wine before it’s time” was Orson Welles’ line in a commercial decades ago for Paul Masson wine. “We will rely on no technology before it’s time” should have been a cornerstone in Illinois’ energy policy. The consequences of that mistake are rapidly becoming apparent.
Mon, 09/05/2022 – 12:40