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67 comments on How to keep on financing wind farms when banks have no money left.
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67 comments on How to keep on financing wind farms when banks have no money left.
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Do you really want to keep on financing wind farms?
In Arizona here is how it works for the tax payers:
"The Arizona Corporation Commission raised the monthly charge that Arizona Public Service Co. residential customers will pay in 2009 to support renewable energy to $3.17 a month from $1.32 a month.
That’s a 140 percent increase for the maximum tariff on people living in homes and apartments. Businesses would see their monthly charge increase to a maximum of to $117.93 from $48.84.
Large industrial customers could see tariffs of $353.78, compared with the current cap of $146.53.
The tariffs will be worth an estimated $78.4 million to the utility, which uses the money to acquire renewable energy and pay incentives to people who use rooftop solar and other renewables."
Note this is per meter. Lots of businesses have lots of meters.
How about wind power in Texas?
" A power producer typically gets paid for the power it generates. In Texas, some wind energy generators are paying to have someone take power off their hands.
Because of intense competition, the way wind tax credits work, the location of the wind farms and the fact that the wind often blows at night, wind farms in Texas are generating power they can’t sell. To get rid of it, they are paying the state’s main grid operator to accept it. $40 a megawatt hour is roughly the going rate."
http://knowledgeproblem.com/2008/12/16/more_on_wind_po_1/
In short “You are wasting resources in order to produce subsidized goods,”
I suggest you read the entire article as it indicates were subsidies would be more useful if desired.
I find it the pinnacle of nitpicking to assume that $1.85/month more for clean power is somehow a unbearable burden. Calling it a 140 increase is attempting to make it look bigger than it really is.
So large industrial customers might have to pay $200/month more? Take that drop in the bucket out of the millions of $ in excessive overcompensation to upper management and stop whining.
Your article stated "Wind power developers could easily time the addition of still more wind power capacity in the region to match the expansion of transmission capacity."
I'm afraid I agree with Steven Chu, "Coal is very, very bad" and support every effort to help break our addiction to it.
It obvious you are not a small business man. One small business man, who operates camping grounds and marinas in Arizona has over a hundred meters. He estimates a two to five thousand dollar increase in his utility bill. It is also obvious that you never ran a number of large irrigation pumps, either. (Actually large or small, numbers count here.) Also, I think you would be hard pressed to find one large customer with just one meter that pays the minimum increase of $200. So you are all for taking money from tax payers to subsidize a production that doesn't have a market? Then I guess you are all for the bailout of GM & Chrysler.
http://phoenix.bizjournals.com/phoenix/stories/2008/12/15/daily64.html
Arizona doesn't have wind. Arizona public service corp. is building a solar plant but it is unclear whether there is an correlation between that and the 4% rate increase.
One tiny outlier should never be the deciding factor when thinking of the choices to take that affects millions of people. Irrigation pumps in the desert? There's a business with a future.
And I do run a small business.
They recharge the aquifers with waste water and Colorado river water. It's illegal to do toilet to tap around here but if you pump water into the ground and back out again, then it is ok.
If this marina/campground has 100 meters, then they are probably metering power to their tenants rather than including it in the site rental fee. I'd also bet that these meters don't belong to the power company, but to the park itself for the purpose above, and aren't subject to the power company's meter fee. That's the way the RV park we live in part time operates. We pay a $2/mo meter fee plus the power we use at the park's business rate directly to the park, not the power company. The $2/mo meter fee is to amortize the cost of the meters over time.
Go over to the Coyote Blog and ask the man; he answers Email.
I doubt if that is enough. The typical ankle-biting small businessperson - to use Joe Bageant's term - is getting away with murder. No, we don't need more of them. And no, we don't need the big auto companies. What we need is to get rid of all those resource suckers. Get rid of the camping grounds. Get rid of the marina. And we probably need to get rid of those irrigation pumps too - odds are they are sucking some glacial epoch water supply.
Business. We need to get rid of business. At least as something separate and above society.
cfm in Gray, ME
puhkawn,
Your concern for the small business owners sounds valid and sincere. I was once a business owner myself and can attest to "the law of unintended consequences."
However, we wouldn't want to throw renewables out the window due to the way utilities currently bill if there were some other reasonable solution. Is there the possibility of metering reform of some type that could overcome this problem?
In a way, one can see how it would be to the utilities advantage to stick in as many meters as possble, and then bill the business owner for any and all changes "per meter". The utilities would then have veto power over any attempt at renewables right from the start if this is allowed. It is for this reason that some businesses in the U.S. are going off grid, even if they have to pay a bit more for fuel, because the tacked on fees and expenses of dealing with the electric utility simply become more than the business owner wants to or is able to bear.
RC
I am retired and was a small business man my entire life. For health reasons I spent a goodly number of years in Arizona. I think wind generated electricity is fine. I am against market distorting mandates and anything that exist solely to receive a government handout. (Rent seeking.) If you do subsidize wind generated electricity then it should be a packaged deal including the infrastructure to sell the electricity produced. Sort of seems like a no brainer, huh? Subsidizing hundreds of wind powered generators that lack the infrastructure to sell the generated electricity is not solving the "energy crisis" it is, however, a terrible allocation of taxpayers money.
You might be interested in seing the latest ad lampooning clean coal by the "we can solve it" group,
http://uk.youtube.com/watch?v=pKC5YV2yrFk&feature=channel
There's still plenty of money being spent by coal to convince people that it's OK:-(
They view climate change as a very serious threat to their business, so they're going all out to confuse people.
Actually, the net effect on consumers of wind is to _lower_ prices for them, as, when wind blows, the marginal price is much lower and applies to all the power generated. The savings to consumers from lower prices when wind blows are already larger than the gross amount of the subsidy given to wind in countries like Denmark, Germany or Spain (and of course, even larger than the net subsidy which is the feed-in tariff minus the market price). So focusing only on the tariff while ignoring the simultaneous effect on market prices is silly.
Ironically, this means that wind will always require a regulated tariff as, the more wind you put in the system, the lower market prices will be (when wind reaches 50-100% of system needs as is already happening in Denmark or Spain, prices come down to almost zero) and wind can never be profitable under "pure" market conditions. So you need wind farms to keep on getting a steady revenue in order to be built; the good thing is that the tariff reuired can be quite low (in the same range as market prices are today) and never needs to be increased.
Any product that for about one third or more of its production you have to pay people to get rid of and have to collect a government subsidy doesn't lower the prices for the consumer. 100%? I'm not talking about Spain or Denmark; I am talking about Texas & Arizona.
Maybe when the wind is blowing just right Denmark gets 100% of its power from wind; however, for 2007 is was considerably less. East & West Denmark wind power generation was 28%; a far cry from 100%.
http://www.energinet.dk/en/menu/Environment/Environmental+key+figures+fo...
Wind farms make a lot of people feel good on The Oil Drum but if you are going to throw taxpayer dollars around how about first building the proper grid to use wind power generated electricity.
Arizona doesn't actually have a commercial wind farm. There are some proposed. And there are individual ranchers with windmills for electricity or irrigation pumps.
http://www.windpoweringamerica.gov/images/windmaps/az_50m_800.jpg
Lots of opportunity for the surplus wind in low demand in Denmark.
http://www.investindk.com/visNyhed.asp?artikelID=20525