Wind Power: Take note.

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By Bram Kivenko on 1 October 2009 - 9:59am

There is a lot of stumping for wind-power.  Frequenters to this forum will know my position on nuclear as a remedy to CO2 emissions from fossil fuel power plants (good and bad.)

Here is Michael Trebilcock's summary of a new Danish report on its wind energy progress:

http://network.nationalpost.com/np/blogs/fpcomment/archive/2009/09/30/wi...

The most damning aspect of his reading of that report is smack in the middle of the article:  "A very optimistic ball park estimate of real net jobs created is around 10% of the total wind power work force, or 2,800 jobs.  In this case, the actual subsidy for each additional job created is US$90,000 to US$140,000"

Also mentioned is that the carbon offset runs at $124/tonne.  For those who don't get what I am saying, Denmark might have performed better had they simply taxed carbon at $100/tonne and used this money to pay for tendered proposals to reduce stratospheric carbon.

The referenced report is from the IER, whose neutrality has been questioned.  I have been able to find claims about the neutrality of the report, but have been unable to find arguments that actually dispute their findings or explanations on how their findings may be out of context.

You may also with to read the following article:  http://www.thenewamerican.com/index.php/tech-mainmenu-30/energy/1890-dan...

And before you get on my back, I am not saying we should dump wind power.  My complaint is that when the government gets involved, things have a tendancy not to be run efficiently because there is centralized control without competition between multiple solutions.  If the solution is reduce CO2, Denmark could simply have fostered an environment for enterprising individuals to come up with more economical solutions and made it more expensive to release carbon.  This would be the fiscally conservative thing to do.

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A steal at twice the price?

Submitted by Erich Jacoby-Hawkins on 1 October 2009 - 5:30pm.

"The actual subsidy for each additional job created is US$90,000 to US$140,000"

So that's about 1/10 of what we paid per job saved (no guarantees) in our auto bailout? Sounds like a bargain.

Of course, the automakers always get the gold-plated subsidies. But even compared to the "standard" cost of government-created jobs, it's a deal. Terence Corcoran calculated the cost per job created of Flathearty's stimulus at $273,000, and the Cato institute says double or more for Obama's package. Neither of those is my preferred source for analysis, of course. I'm just sayin'.

Denmark has one of the highest tax rates in the world, so they'll be getting that money back from the new hirees pretty quick.

If you go to buy a nice, big wind turbine you'll quite likely be buying a Danish one. Odds that you can source one made in Canada are pretty low. Again, just sayin'.

I see more value in putting subsidies toward jump-starting a growing future industry (wind) over putting public money into backstopping a failing one (gas guzzlers). Of course, I'm a big fan of carbon taxes - but they alone may not be as swift as we need at spurring change.

It's certainly a discussion worth having, anyhow.

Erich Jacoby-Hawkins, Barrie ON - although I'm on Cabinet (Nat'l Rev. and Ecol. Fiscal Reform), views here are my own and may not reflect official GPC positions. Please visit www.ErichtheGreen.ca

Two processes to achieve the same goal.

Submitted by Bram Kivenko on 2 October 2009 - 1:51am.

[I'm certainly not cheering the auto bailout.   The business needed an orderly wind-down, but the bailout was rather generous, I think.]

Anyway, my argument here is that you can tax carbon at approx $100/tonne (or $124/tonne according to this report), and then simply rebate it evenly based on electricity consumption (so it's revenue neutral), turbines would get basically the same economic advantage compared to fossil fuel reactors as under the current Danish system.  Ie, you purchase power at 20cents/kwh but you get a 10 cent rebate.  Thus any carbon free producer can sell at 20cents/khw.  However, carbon polluter producers would be dinged 10 cents, so they could only sell at 10cents/kwh.  (Those numbers are not meant to be realistic.)

Isn't this our tax shift policy, anyway?

The difference I want to highlight is that it would not disadvantage other technologies which could good or better than turbines for at least some applications.  If the goal is to reduce carbon, then tax carbon and give the money to the alternatives.

I just don't want us to fall into the trap that I think Denmark has fallen into -- they pay nearly 8 times what we pay for electricity, they have not offset as much carbon as they pretend, and they have not created very many jobs in the process.

As an aside, odds are we would get a turbine sourced in the US with parts made in China.  Regardless, individual Danes would see very little money from a turbine purchase.