Thursday 1 March 2012

Letter From the UK

Wind No Longer in the Sails of "Green" Energy Companies

Command and control economies produce one thing consistently--massive waste.  The government push to "green energy", of which subsidized wind "farms" are an example, illustrates the problem.  Wind farms will never get off the ground literally until they can demonstrate that wind turbines can produce electricity as cost effectively and as efficiently as other energy sources.

To date, without massive government subsidies wind farming is like colonising the moon: a grandiose form of economic waste.

It seems that the mood is changing in the UK.  Wind farms are being seen for what they are.  Troughing big businesses--looking to cash in on a pile of government money--are now rethinking.  Risks are rising for them as government funding becomes more and more uncertain.

This from The Guardian:

Wind energy companies fear government's commitment is cooling

Wind power firms express concern over future policy and reveal how investment in the UK's energy infrastructure is on hold

Millions of pounds' worth of investment in the UK's energy infrastructure is on hold or uncertain because of concerns over the government's commitment to wind energy.

In an exclusive survey, the heads of some of the world's biggest wind companies, which have been considering setting up factories, research facilities and other developments in the UK, have told the Guardian they are reviewing their investments or seeking clarification and reassurances from ministers on future energy policy, in the wake of growing political opposition to wind energy that culminated in this month's unprecedented attack on the government's policies in a letter signed by more than 100 Tory MPs.

An "unprecedented attack" refers to the growing criticism of the wasteful spend on wind farms.  As a consequence, companies are putting their activity on hold until the commitment of government money is more firm.  In other words, without tax payer subsidies, wind farming has no justifiable economic rationale. 
General Electric (GE) Energy's managing director, Magued Eldaief, told the Guardian his company's proposed wind manufacturing investment – amounting to at least £100m directly but worth much more in its knock-on effect to the economy – was "on hold" pending ministers' decisions on future reforms to the energy market.

"Our investment is on hold until we have certainty and clarity regarding the policy environment that we are in," Eldaief said. "One of the most important things for us is political certainty, so we can justify the business and investment case for a facility in the UK. But we think there are some [political] headwinds which do not help, especially in terms of the subsidies discussion."
Without tax payer slush, wind power is uneconomic.  This is the bottom line--the hard reality.  Consequently, orders dry up for the manufacture of wind turbines as soon as taxpayer subsidies become questionable.
Vestas, the world's biggest wind turbine maker, said it was waiting to see whether its customers were able to sign orders before committing to build a proposed turbine factory in Kent that would create about 2,000 jobs. Mitsubishi, Gamesa and Siemens – all potential investors in offshore wind to the tune of hundreds of millions of pounds – also expressed concerns that an anti-wind power backlash was building up in UK politics, after the MPs' letter to the prime minister called for subsidies to be slashed and cast doubt on the value of wind energy.
Mitsubishi and Siemens are not small fry.  Nor is GE.  Yet none want to invest in wind farms on the commercial merits of wind turbine electricity generation alone.  They have done the numbers.  They know they do not add up.  They know that wind power is a massive loss making enterprise without government featherbedding.  The chief executive of Mitsubishi said it all:
Akio Fukui, chief executive of Mitsubishi Power Systems Europe, which is mulling an investment of more than £30m in research and development in the UK, said: "Commitment from the government to proceed is vital. If the government commits, then investors will come."
Of course that argument could be made for any activity whatsoever.  An enterprise which drowns the entire country in tiddley-winks would attract investors, if the government "committed".   Wind farming is not about electricity at all--it is all about farming the taxpayer.  It is a crony capitalist's nirvana. 

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