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A substantial difference with accelerated amortisation with windfall gains is that accelerated amortisation does not roll out more wind power capacity, and so does not have the same positive impact on Sweden's net exports.

It avoids the boom and bust in the building cycle by avoiding the boom part. That's not the part we want to avoid. And since a substantial share of the boom and bust falls to German capital goods industry.

To the extent that we can shelter windpower from under predatory state institutions with a feed-in tariff, that's a superior option, but if we cannot get windpower out from under predatory state institutions, better to structure things so that there is a boom while busts can be ridden out without bankruptcy.

In terms of the "seed farm" wind turbines, structured as described they survive through a bust and reproduce when experiencing windfall gains. And every windfall gain financed turbine only needs to cover minimal operating and maintenance costs.

Once the prorated "seed farm" capital costs over the output of the "seed farm" and "seeded farm" are below the capital costs plus lowest fuel cost of gas turbines, the whole complex becomes always-reproducing, and the boom and bust is about the rate of reproduction.

All assuming, of course, a relatively small open economy with cross transmission into a larger regional demand sink.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Mar 30th, 2011 at 02:50:43 AM EST
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