Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
We have NOT tried yet to boost renewables massively. They are taking off because they are competitive enough with what little help is provided.

There's a great economic reason to boost wind and solar - they provide an absolute cap to the price of electricity, i.e. a guarantee that prices will go no higher than the level necessary to build that capacity. At a time when energy prices are going up, up, up, it should be valued.

And, additionally, as the Economist notes this week:

adding wind power to the grid can reduce the overall cost of electricity. The marginal cost of producing wind power is almost nothing, since the fuel--wind--is free. So on a windy day, the cheapest power comes from wind turbines. That power, in turn, displaces generation from sources with higher fuel costs, such as gas-fired plants. So power prices tend to fall when the wind is blowing. Nuon, a Dutch utility, calculates that in 2005 the average power price on the local spot market was over €45 ($56) per megawatt hour when there was no wind, but under €30 when the average wind-speed topped 13 metres per second.

Researchers in Denmark have gone a step further and put a value on this effect. They believe that wind power shaved 1 billion kroner ($167m) off Danish electricity bills in 2005. On the other hand, Danish consumers also paid 1.4 billion kroner in subsidies for wind power. But this year, reckons Rune Moesgaard of the Danish Wind Industry Association, wind power will actually save consumers money for the first time, as the benefits resulting from lower power prices outweigh the falling cost of the subsidy.

Even without carbon tax, and without killing all the subsidies going to coal and other traditional power sources, wind is a winning proposal today - for society, if not for business.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Jul 10th, 2007 at 04:56:10 PM EST

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