Why wind needs feed-in tariffs (and why it is not the enemy of nuclear) | 77 comments (77 topical, editorial, 0 hidden)

Why is local ownership important?

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Mon Mar 3rd, 2008 at 09:26:31 AM EST
[ Parent ]

Because it means that economic value which is created locally stays local instead of being hoovered up by Wall Street, or more likely, by Sovereign Wealth Funds doing to the US what the US did to them.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Mar 3rd, 2008 at 09:53:07 AM EST
[ Parent ]

Re: Random comments (none / 1)

And it means that local communities have a reason to support rather than oppose these projects - they see the benefits accrue directly to them.

OTOH, local ownership models work better with small-scale development, as in Germany. For the large stuff, you're talking governments or corporations.

by IdiotSavant on Mon Mar 3rd, 2008 at 12:32:27 PM EST
[ Parent ]

Community Ownership (4.00 / 2)

In fact, the upper Great Plains (Minn et al) has a relatively strong community windpower program. I don't know the details, but it allows individual farmers and groups to own their own projects. John Deere Capital has provided financing and turbine servicing, and i'm certain others are involved as well. The program is being used as a model for other areas.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Mon Mar 3rd, 2008 at 01:34:53 PM EST
[ Parent ]

Re: Random comments (4.00 / 3)

Yes. This local/distributed mantra. That's something that really bugs me. As if it had any great virtue.

There is a model that works very well and that has proven itself in France : the public monopoly. It can invest at low capital cost, plan for the very long term and work for everybody's benefit, independent of wealth, status and geography. It's a creator of solidarities, like Social Security in the US has managed to survive 70 year of unrelenting right-wing assaults because it has always served everybody and it's just too big to attack. The same thing organized at the state or county level would have never survived.

What the localists forget is that local anything is a recipe for parochialism. Mine. Mine but not the neighbour's. And then it creates a lot of small operators with no economy of scale, expensive, fragile both in terms of service and of financial strength. You don't care if a plant breaks down when you have 200 of them. That's 199 left to take over the load. But if you have only one, you're screwed. And all those little operators are wonderful targets for large corporations to take over, one by one. Plus localism just multiplies opportunities for corruption and back-room deals.

The US has already gone through a similar experience, with the goodness and virtue of localism decreed from high above by ideological wankers.

It was for wireless carriers. The diversity sucked big time, failing to provide any serious service and setting down cell phone technology and services big time in the US. And now, the "diversity" is gone as nearly all the small operators have been picked one by one by the big ones, above all ATT, and the US is left with is an unregulated oligopoly with a bad regulatory framework and a service that still sucks. It would have been much simpler to auction a couple of national licenses and condition them to strict requirements on universal coverage, pricing and quality of services.

Pretty much the same thing happened for cable operators. The local cable co-ops have been picked one by one by Comcast and friends. Their service sucked. They never the technology heft and the economy of scale to do anything better. And now, it's still the same horribly expensive crap and any notion of local control is gone.

That notion of localism only works in theory. It doesn't survive 5 minutes in the real world. It completely ignores the basic lesson of the industrial age - standardization, economy of scale, universality, general ownership. Those are the only principles that work and deliver the goods as soon there is a natural monopoly or oligopoly as there always is for any large scale infrastructure.

by Francois in Paris on Mon Mar 3rd, 2008 at 03:28:39 PM EST
[ Parent ]

Yes, yes, yes (none / 1)

and this is all the more true whenever you have actual network effects.

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

by Jerome a Paris (etg@eurotrib.com) on Mon Mar 3rd, 2008 at 04:23:29 PM EST
[ Parent ]

Yes, yes, yes and no, no, no - (4.00 / 3)

Yes to both approaches. Let a thousand flowers bloom - and any other such cliches, because they are true. We need to build via every approach available. If a government monopoly can be approved, go for it.

Here in the U.S., that ain't going to happen for a little while yet. Meantime, as Crazy Horse points out, it's happening in many places on various scales. He leaves out the massive wind farms in Wyoming and the medium-sized farms going up in Oregon. He probably doesn't know about the smaller farms planned for several locations along the Columbia River.

It's true that the NIMBY factor, plus financing and permitting, all present delays. But, interestingly, they also create publicity via the standard reportorial affinity for adversarial situations. The public debate is feeding the interest, not suppressing it.

You may not know either that we have 'feed-in' tariffs here in Washington state. That, and the referendum initiative that we approved in 2006 is creating a demand that has already outstripped supply.

As to nuclear - government monopoly only, as Jerome suggests.

paul spencer

by paul spencer (paulgspencer@gmail.com) on Mon Mar 3rd, 2008 at 05:05:02 PM EST
[ Parent ]

Re: Yes, yes, yes and no, no, no - (4.00 / 2)

i've actually walked some of them, so yes, i do know much of what's going on in the US. I've prospected the Columbia River sites, walking the hills years before there was a singly turbine. Wyoming, sure, i've even been to several dozens of ridges in Montana where there's not yet a single turbine. i've walked the deserts of West Tejas, and taken strip chart data from the Adirondaks.

it's not just let a thousand flowers bloom, here's an instance where it's actually working.

btw, i left out lots of windfarms around amurka in my various descriptions and comments. i still can't believe there's a 300 MW facility near Lake Erie... which the locals love (at least as i'm told.)

There's windfarms in pennsylvania, where there's only marginal wind. But the factories are there, supported by the Steelworkers Union, hard to beat that.

There's even a thousand MW project just across the border in Mexico, hoping to be built by the former San Diego utility subsidiary Sempra because they "don't need no stinkin' badges" in Mexico, though the wind itself actually doesn't halt at the border.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Mon Mar 3rd, 2008 at 05:30:46 PM EST
[ Parent ]

NO, NO, NO (4.00 / 6)

As an "ideological wanker" with no ideology to defend, I'd just like to say you don't understand the concept here.

The object is to give the landowners something more tangible than the paltry royalties given by the US developers. Which this does, without losing any economy of scale, because construction, service and mainenance are performed by the same local crews who do the big projects. when it's isolated by geographical area, there is no loss of efficiency.

"This local/distributed mantra. That's something that really bugs me. As if it had any great virtue."

Since we're talking about the production of electricity, one would think that even the non-parochial would be able to understand the globally accepted electrical engineering principle that diversified sources of generation spread throughout the grid are a vast benefit, proven over and over not only in northern Europe but in China and India, and even the spread out US midwest.

Economies of scale, including French state support, may well be perfect for high level operation of significant nuclear power (it certainly works better than in the US), but it is simply not replicable for windpower in the US.

And by the way, no one here is saying that locally owned windpower is the only way to go, far from it, but it is an absolute part of the mix.

Another reason that locally owned windpower has taken a small hold in the US is to right the wrongs perpetrated on the resource owners, the farmers and ranchers, who were taken to the cleaners by the majority of wind developers. They were paid piddling royalties, and given false production stats, so that's where the impetus for local ownership comes from. Right, Anglo Disease Windpower planted the seeds for other financing methods.

IN a just world, your public monopolies are benevolent. In the US, they almost never were. In actual fact, the federally granted utility monopolies were predatory to the nth degree. In fact, the then largest US utility began by taking over small hydro projects in the Sierra Nevada at gunpoint.

I too believe energy is too important to be left to the free market, but what works in France for nuclear would not work in the US. I would love to head the EDF windpower group in the US, and in fact i talk to them as they are one of the biggest forces in the US industry.

But the pablum here against local ownership, especially considering the absolutely small portion of the industry it represents, is way offbase.

"""That notion of localism only works in theory. It doesn't survive 5 minutes in the real world. It completely ignores the basic lesson of the industrial age - standardization, economy of scale, universality, general ownership. Those are the only principles that work and deliver the goods as soon there is a natural monopoly or oligopoly as there always is for any large scale infrastructure."""

Since it's already working in the upper Great Plains, and since the landowners like it, and since they don't get ripped off, and since it's great for the grid, and since the same economies of scale are provided by centralized financing, construction, O&M... what exactly are your problems?

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Mon Mar 3rd, 2008 at 05:20:37 PM EST
[ Parent ]

Re: NO, NO, NO (4.00 / 2)

Since it's already working in the upper Great Plains, and since the landowners like it, and since they don't get ripped off, and since it's great for the grid, and since the same economies of scale are provided by centralized financing, construction, O&M... what exactly are your problems?

It's not going to work for long. Wall Street will take care of it.

That's what you don't get. If you accept this kind of small scale, privately financed developments, you accept Wall Street. If it's private, Wall Street will clean its clock as soon the opportunity comes. At the slightest difficulty, they will come with their bridge loans, their convertible bonds and their PIPEs.

The point of a public monopoly is to tell the market and the finance guys to fuck off once for all, to tell them "not for you", not for short termer greedy assholes. Too important to let them fuck with it.

And every time the libertarian/autonomist wing on the left goes on those "small is beautiful" "local, yeah!" crusades, they end up validating free-market ideology, throwing good government in a vicious circle of decay and incompetence and giving sweet, juicy little targets for Wall Street to make a quick buck at everybody's expense.

There are certain things where the optimal solution is big gov and public ownership. It'd be nice if this battle was only against the right wingers, not half of the left on top of that.

In the meantime, US health care sucks, US energy sucks, US railways suck, US basic education sucks (arhh, local school boards! Please, someone abolish them ...), US telecoms suck, US cable sucks, US highways are full of potholes and US bridges are falling in the river. The US is turning in a 3rd world country and it's going to go that way as long it doesn't understand that capitalism and private ownership are perfect for manufacturing shoes but are a fucking disaster when it comes to running a country.

In a just world, your public monopolies are benevolent. In the US, they almost never were. In actual fact, the federally granted utility monopolies were predatory to the nth degree. In fact, the then largest US utility began by taking over small hydro projects in the Sierra Nevada at gunpoint.

AFAIK, save for TVA, those were not public monopolies but state-sponsored private monopolies. A public monopoly has only one shareholder, the government, and in practice, none if it is setup as an independent agency.

by Francois in Paris on Mon Mar 3rd, 2008 at 07:27:33 PM EST
[ Parent ]

Re: NO, NO, NO (none / 1)

It'd be nice if the battle were only against the right wingers, not half of the left on top of that

Can I steal that line?

We have met the enemy, and he is us — Pogo

by Carrie (migeru at eurotrib dot com) on Mon Mar 3rd, 2008 at 07:33:23 PM EST
[ Parent ]

Re: NO, NO, NO (none / 0)

Mig, steal everything you want.

I see you've just promoted PES's nuclear diary. You really want a food fight, do you :>

by Francois in Paris on Mon Mar 3rd, 2008 at 07:37:20 PM EST
[ Parent ]

Re: NO, NO, NO (none / 0)

Stolen.

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris

by Carrie (migeru at eurotrib dot com) on Sat Mar 8th, 2008 at 07:21:48 AM EST
[ Parent ]

Re: NO, NO, NO (none / 0)

Francois in Paris:

It's not going to work for long. Wall Street will take care of it.
That's what you don't get. If you accept this kind of small scale, privately financed developments, you accept Wall Street. If it's private, Wall Street will clean its clock as soon the opportunity comes. At the slightest difficulty, they will come with their bridge loans, their convertible bonds and their PIPEs.

Hmmm...

I think what you maybe miss is that Wall Street is fucked.

Period. Peak Credit.

The only clock they'll be cleaning is the one in their kitchen.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Mar 3rd, 2008 at 07:58:33 PM EST
[ Parent ]

Re: NO, NO, NO (none / 1)

Don't worry. They'll come back. They always do.

If you'd run a "where are they now" on all the Enron geniuses, there's a handful in jail but I don't think there are many burger flippers in the remaining cast.

How do you spell "hedge funds"?

E . N . R . O . N

Cheers !

by Francois in Paris on Mon Mar 3rd, 2008 at 08:56:41 PM EST
[ Parent ]

Re: NO, NO, NO (none / 0)

Of course the bright people in need of an ethics transplant go where the money is, and that's hedge funds.

But hedge funds don't CREATE money like Banks do, they just punt it around, and the Bank prime brokerages cream them as they do.

That doesn't mean we haven't reached Peak Credit (and therefore Wall Street is fucked) - in fact it supports the thesis.

And anyway - how many Hedge Funds are on Wall Street ?!!

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Tue Mar 4th, 2008 at 06:21:03 AM EST
[ Parent ]

Re: NO, NO, NO (4.00 / 2)

But hedge funds don't CREATE money like Banks do, they just punt it around, and the Bank prime brokerages cream them as they do.

Don't worry, everybody takes its cut. And if they don't, they walk away and start over. And when they loose, to quote the immortal words of George Parr, it's not them who will suffer, it's your pension fund.

by Francois in Paris on Tue Mar 4th, 2008 at 06:36:16 PM EST
[ Parent ]

Re: NO, NO, NO (4.00 / 5)

private ownership are perfect for manufacturing shoes but are a fucking disaster when it comes to running a country.

that is so true...

'economic growth' is great for getting peasants running water, schools, hospitals, good transport links, internet access, solar panels etc. at the 'bottom end' of the food chain.

the same system taken to its absurd level, we see bitter fruit now in the ponzi scheme enronisation of huge wodges of public trust finance, which should be in the hands of low-risk, honourable, sober treasurers, not rabid yuppie gamblers' anonymous predators who, when weighing human against economic costs, always come down in favour of the latter, chewing up finite planetary resources, homogenising and de-skilling ancient cultures and spitting out misery for the many, and a gilded cage of paranoia for the few.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Mon Mar 3rd, 2008 at 08:54:10 PM EST
[ Parent ]

Re: NO, NO, NO (4.00 / 6)

If you accept this kind of small scale, privately financed developments, you accept Wall Street. If it's private, Wall Street will clean its clock as soon the opportunity comes. At the slightest difficulty, they will come with their bridge loans, their convertible bonds and their PIPEs.

None of this happened in the local ownership and small-scale-project dominated wind 'market' in Germany, Denmark and Netherlands, and the German PV 'market' even more so. What's more, outside of the USA, private finance can also work on a large scale, with large local regional monopolist private owners of both grid and generating capacity, e.g. Germany until 1998. If you want to paint with a single brush, we could say that nothing works under the Anglo Disease, be it state-funded projects or distributed power with distributed ownership.

But, as someone supporting distributed power with distributed ownership, yet opposes any rail privatisation, I am not one who sees the same solution everywhere.

In the power sector, I do support centralised state ownership of the grid, as well as centralised state ownership or at least coercive coordination of establishing reserve capacities. The state should also be in control of energy policy, and a feed-in law is a (strong) tool of energy policy.

Wind farms, and renewables in general, are not for short-term greedy assholes, unless the financing structure is very fucked up. Local farmers aren't in for it on the short term, either.

To supplement Crazy Horse, the suggestion of parochialism is off also because of the intermittency of most renewables including wind, thus linking up in a coordinated grid is essential. Against your economies of scale is the factor of redundancy and grid stability, while distributed power is not without economies of scale (it is in fields not connected to turbine ownership, manufacture and maintenance).

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue Mar 4th, 2008 at 05:01:07 AM EST
[ Parent ]

Why wind needs feed-in tariffs (and why it is not the enemy of nuclear) | 77 comments (77 topical, 0 editorial, 0 hidden)

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