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The one fly in the U.S. part of the ointment is the lack of Feed-In Laws in this country. The expansion in the wind business that would result if this occurred would be quite amazing. Bankers (some of them a bunch of low-life gamblers, and others who are competent - a mixed bag) would love the relative low risk nature of making loans to developers who would actually have known cash-flows for 20 years. Unions and communities would love it for the expanding source of jobs. Jobs are good, especially these jobs. Businesses who supply parts and expertise would love a market actually growing and not that undergoing that horrible Sinfeldian term of "shrinkage". Etc.

But, we have a bunch of buttheads who are often part of the Environmental community (NRDC is one example), or who head up AWEA, or are the politicians and regulators who need to pass the laws/implement regulations that would allow FIT's to be one of the choices (the others are the MACRS/PTC tax subsidy approach) for wind turbine operations (and thus installation). These are just more snowdrifts that need to be moved out of the way, but it would be nice if they got on board with Paul Gipe, instead of fighting him so much. There is also quite the legal cottage industry which does the significant machinations needed to convert "active income" into "passive income", or which lines up those with tax appetite (for up to 10 years into the future, no less - quite a feat of prediction in this new era) to developers. The fear that electricity prices might rise for a while (until you get to the wind turbine Feed-In Tariff level) strikes fear into regulators and politicians. Of course, Peak Oil, Peak Ngas and Europe's lust for relatively cheap Appalachian coal (we kill mountains for furriners so they can have coal real cheap, or at least relatively cheap) will raise those anyway, and far in excess of what wind FITs will do. But as Homer the Wise likes to say - "Doh!"

There are efforts in Michigan, now Indiana, Minnesota, possibly Illinois and New York, and maybe California to allow FIT laws to be a part of the wind scene. So it would be really nice for at least some states to turn from the Dark Side of electricity price gambling, and tax payer subsidies that only go to the really, really rich. There is also rep Jay Inslee's nation version of Feed-In Laws, a bit of a tougher stretch. For places like Michigan and Indiana - they have cheap coal power for electricity but no new jobs and unemployment way in excess of the official numbers, and if they want jobs, they will need feed-in laws to counteract that supercheap electricity from old coal burners that retails for 3 to 4 c/kw-hr. Those old, fully depreciated and wearing out nukes that are being milked to the max supply cheap energy, but any new ones will make quite expensive electricity. Pricier than wind by a long shot. A situation somewhat like allowing Whiskey and Rum to sell for $1/liter - cheap electricity has its fans, but it's almost always based on pollution that trashes the future.

So, to paraphrase Cheech and Chong, cheap electricity but no jobs, or reasonably priced electricity and lots of jobs. Where is Homer the Wise when we need him?

Last year (2008), only 8500 MW was installed in the U.S. That was only 62% more than was installed in 2007 (5244 MW), a year where twice as much was installed compared to 2006, with about 2500 MW. Anyway, this is just a drop in the bucket of this hemisphere's potential. This installation rate was somewhat limited by the presumed end of the MACRS/PTC extension on 12-31-08, but that excuse went away in October, and with the election results in November. Availability of turbines and turbine components was also an issue, but with a number of project cancellations and layoffs in manufacturing (DMI for towers, LM Glasfiber for blades, Clipper for turbines), that's not a problem anymore either. Prices for key items like steel, copper, nickel and aluminum (for transmission wires) have also dropped since the peaks of mid-2008, so presumably manufacturing costs and prices will stabilize. Just dependable project financing, something the Feed-In Laws are really good at providing.

Anyway, thanks for the article!

Nb41

by nb41 on Thu Jan 22nd, 2009 at 12:43:25 PM EST
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