Alternative energy investors run for the exits

McGuinty Liberals put all our eggs in a fake industry

National Post

Bloomberg news reports that investments in wind farms, solar parks and other “clean energy” projects have plummeted since European governments announced they would reduce the inflated, guaranteed prices they pay for power from alternative sources.

New investment in renewable energy dropped to the lowest in two years in the first quarter, weighed down by low natural gas prices in the U.S. and subsidy cuts in Europe, Bloomberg New Energy Finance said.

Money flowing into the industry through asset finance, share sales, venture capital and private equity fell more than a third to $31.1 billion in the first three months of the year from a record $47.1 billion in the fourth quarter of 2010, the London-based researcher said today in a statement.

Countries including Germany and Spain have announced reductions in the guaranteed prices that they pay for electricity from renewable sources while in the U.K. the government is reviewing the rates. Gas in the U.S. in September fell to its lowest price since 2002 amid a glut in production.

So as long as governments are willing to pay exorbitant amounts in subsidies, investors are willing to put money into “clean” energy. But once they’re faced with the prospect of actually producing a competitive product that people will pay for, they run for the exits. Great business plan, that.

15 thoughts on “Alternative energy investors run for the exits

  1. Governments have created an artificial demand for wind turbines and solar panels that otherwise would not be created without government money. The financial markets won’t support anything that does not make money. Money flows into goods and services that make money for investors.

    Investors don’t want to waste capital on losing business propositions. No one wants to lose money.

    Would anyone like their bank or credit union to invest peoples savings in losing business ventures?

  2. Yes but these subsidies have created artificial demand leading to lowered cost of production. Lowering subidies was a part of the plan. We will see that happen here soon with wind and solar (and ethanol for that matter) The weak will fall out and the strong will survive!!

    L

  3. Dear LarryP1;

    I have a lovely property for sale in Florida that I think would interest you greatly. It may seem a tad expensive right now, but with the passage of time, improvement in the local economy, and new dewatering and alligator-removal technology, I’m sure it will seem like a bargain when you look back on it in twenty year’s time. (sarc)

  4. LarryP1,

    There will only be a small cost reduction for IWTs due to a reduction in installation costs and not to a decrease in the cost/price of the turbines themselves.

    The savings come from the fact that the same number of workers can install more turbines in any given location as more turbines can be squeezed into one area. Crews and equipment don’t need to be moved around as often.

    Same with transmission lines as they can be closer togther.

  5. Ernest,

    The 1965 blackout was NOT an accident and this was kept hidden until just a few years ago and it was NOT due to grid failure.

    The last eastern blackout was caused by a tree limb falling on transmission line/lines in Ohio. This was due to allowing trees too close to transmission lines. So not a grid problem in origin. The control room people did not react to the situation in time and shut their part of the grid system down so the problem spread very quickly.

    Many U.S. electric companies resisted the deregulation of the power grid but Washington won out.

    But it is also true that the grid is old and in need of repairs and replacement. When the individual power companies owned their own part of the grid they kept their part of the grid in repair which is not the case today in the U.S.

  6. Oops sorry, I thought this was a pro wind website! I’m looking for a job in the wind industry so I was just snooping around…
    FYI
    http://machinist.in/index.php?option=com_content&task=view&id=2343&Itemid=2

    This article was from 2009 and may enlighten you on the costs of wind turbines coming down due to production efficiencies, raw material cost and lower cost production in other countries such as India.

    There can be no efficiency gains (Barbara) from packing in more turbines/sq km due to the setback requirements set by the gov’t (550m from residents for example)

    Also these are 20 year contracts but in a year or two ( industry rumour has it) that NEW 20 year contracts will be pro rated and with 25% cuts in price paid/kw/hr so for all you concerned folk, there is a light at the end of the tunnel. Nuclear went through the same initial high cost phase and is now becoming more cost efficient as well.

    Sorry about the mix up, I’ll be on my way…
    L

  7. LarryP1,

    You fail to understand that wind turbines are not a reliable source of electricity to begin with. Produce electricity at best ~25-30 % of the time. IWTs are obsolete useless machines.

    Bet you wouldn’t buy a car that only worked at best ~25-30% of the time.

  8. Always thought Moe and Curly were the better of the three. Lol.

  9. Our knowledge about how pitiful the IWTs are as well as our misguided government and their involvement in this mess (at our expense) must be shared with residents in the Golden Horseshoe. This is where a considerable number of Liberal MPPs hold power. If we truly want to turf the present Liberal gov’t we have to get the message out one on one and in the Toronto media. We don’t have long to turn the tide of public support which the Liberals have at present. October will be here before we know it. If you have doubts, where did the first 4 months of 2011 go?

  10. “The weak will fall out and the strong will survive!!”
    I wish Larry would apply this theory to electrical production. Wind energy is weak.

  11. LarryP1,
    The price is up a lot in a short time.

    From testimony from Mr. Jennings, the Assistant 6 Deputy Minister of Regulatory Affairs and Strategic Policy Division at the Ontario Ministry of Energy – on page 34 of http://nuclearsafety.gc.ca/eng/pdfs/jrp/cnsc-jrp-transcript-07-04-11-volume16.pdf

    …So in Ontario, wind is paid thirteen and a half cents a kilowatt hour, and that is up from, I guess, about five years ago when we first did procurement for wind. The first procurement was about eight cents a kilowatt hour, so that’s — that’s turned out to be a higher cost 19 than — than the original procurements.

    13.5 is 2/3rds more than 8.

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