Impact on Economy
Note: counts do not include items in sub-categories
The news that Cape Wind and National Grid, a regional power distributor, will soon negotiate the cost of power from the proposed 130-turbine wind farm in Nantucket Sound sounds like the last act is near.
Perhaps, but it's likely to be a dramatic one. Consider, if you will, the difficulties of calculating the costs of producing power over let's say 20 years if you are unsure of the cost and source of capital, the cost and speed of construction, the unknown difficulties of maintaining offshore power production, the uncertainties of the consumer market.
At the end of 2007, the WilderHill New Energy Global Innovations Index (NEX), a composite of 86 new energy companies covering wind, solar, biofuels, efficiency, and hydrogen, was up by 58%, year-on-year. As of yesterday, however, it was off almost 20% for 2008 so far, compared to a drop of about 8% for the S&P 500. Why would a sector so favored by politicians, environmentalists, and socially-conscious investors suddenly appear to have diminished prospects, just when it seemed perfectly geared for growth? Unfortunately, renewables and the entire alternative energy sector are vulnerable to two of the same principal factors undermining confidence in the economy as a whole: the availability of credit and higher inflation at the wholesale level.
Despite the existence of a voluntary program which allows renewable-resource-loving ratepayers to pay a higher cost to support renewable energy, PGE is charging all of its customers a higher rate for the added renewable energy on the grid by charging 0.22 cents per kWh, or approximately $2.13 extra per month, for an average household.
Recently the New Hampshire Senate Committee on Energy and Natural Resources amended Senate bill 99, placing a moratorium on new wind electricity generation projects for one year. That's a nice start, but it doesn't go quite far enough. What's needed is a repeal of the New Hampshire renewable portfolio standard mandate. Why? Because ratepayers are being forced to buy extremely expensive electricity when cheaper alternatives are available.
Whether the reports of health hazards are true or not is almost irrelevant. Just the fact that many people are truly concerned about the potential health effects of living near a wind farm, or the electromagnetic radiation from high voltage electrical wires, is reason enough to try to avoid buying a property that is close to power lines. It's a simple law of economics: As demand for a product goes down, so does its price. When you have a certain number of people avoiding a certain property, for whatever reason, the price of that property will be negatively affected.
It is important to understand why the Danish government, which appears to have commissioned Mr. Pedersen's comments, is sensitive to critiques of the Danish experience with wind power. Denmark is home to Vestas, the world's largest wind turbine manufacturer, with 20,000 employees and a market share of between 20% and 25%. As the market for its turbines in Denmark and other European countries becomes saturated, it seeks to export the Danish experience worldwide. To this end, it recently ran a multi-million dollar global ad campaign with the slogan, "Believe in the wind," claiming that Denmark has solved the problem of dirty electricity through wind power.
Reunion has been using the phrase “sweetening the deal.” Is this an admission that the offer hasn’t been or still isn’t sweet enough? Reunion has also been stating, “wait until our application is in” to provide all the financial and environmental details of their offers. What strategy is this? Like the legendary Trojan Horse? Get in, then ravage?
I noticed the other week that Deepwater Wind is looking to renegotiate its contract to supply power from its proposed phase one offshore-wind project. As a veteran developer of wind projects and one who worked on an alternative bid to the Deepwater project, all I want to say is I told you so.
Five years ago, when developers applied for a federal permit to build the world’s largest offshore wind-energy project off the Cape Cod coast, a widely held presumption was that the project ought to go forward because wind power is inherently good and that Nantucket Sound was as good a place as any to begin the off-shore renewable energy movement.
But the Cape Wind project hasn’t moved forward and remains mired in controversy as evidence piles up that its developers chose perhaps the worst location. So, instead of leading the renewable energy movement into the future, Cape Wind may be imperiling that very movement by ignoring legitimate and serious flaws in its project.
In the 20 years I have lived in Colorado, I have seen the transition from a growing, functional economy into an economy that increasingly relies on obscure, "politically correct" subsidies such as solar- and wind-power generation that are touted as solutions to our economic woes. ...these partisan policies are undermining Colorado's economy.