Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
I'm having a hard time understanding this argument and why the key players - entrepreneurs, investors, bankers politicians (aka Government) and consumers should go for it. Let us presume for a moment that their primary motivations are - consumers (price), entrepreneurs and investors (risk reward ratios), bankers (interest or service fees to risk ratios) and politicians - (will I get elected next time if people don't like wind farms and I can always blame power outages on the Russians anyway).

The problems seems to be

1)  Short term vs. long term - consumers are worried about their electricity bill this year, entrepreneurs/investors/bankers have to SHOW a profit this year, and a politician's max immediate life span is five years (with an attention span of 5 minutes).

ii) the unquantifiable nature of the risk - Oil prices HAVE gone down dramatically for long periods between spikes in the past

iii) All the investment has to be very upfront - major cash flow issues for anyone who doesn't have deep pockets, or huge credit facilities - you are not talking about humanitarians or visionaries here

iv) The market makers in the "redeemable units" will cream off huge service fees which will make the whole thing unattractive for a small investor

The longer term nature of the business may make it attractive for pension funds who have huge assets and very long term liabilities but who will see wind energy as just one other class of asset in their portfolio and one they can usefully use as a hedge against oil price sensitive stocks (e.g. Airlines.

But is this not good ol capitalism as we know it?

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Jan 19th, 2008 at 07:04:35 AM EST
[ Parent ]

Others have rated this comment as follows:

kcurie 4