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#11 diogenes227

diogenes227

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Posted 03 December 2016 - 11:52 AM

I've advised developers and invested in the wind energy business for almost 40 years and outlined and developed the "avoided cost principle" for one of the co-founders of the American Wind Energy Association in the most nascent beginnings of the industry (and outlined the need for an industry association) . 

 

This "avoided cost" analysis was used in AWA's lobbying efforts in the late 1970's and was ultimately enshrined in the Public Utility Reform Act of 1978 )(PURPA) (which Bob Dole of Kansas introduced into Congress) and required public utilities to purchase power from independent power producers at at least the utility company's "avoided cost",   That legislation is credited with creating the independent power industry in  the US.

 

Multiple projects along the way got me schooled on the costs and the political economics of the energy industry. 

 

Many countries are phasing out incentives for wind at this point, and given the cost structure I suspect more will be doing so in the future.  While incentives still "goose" the economics, many projects can now proceed without such incentives (but develpers would not like to admit it even where a project can stand on its own  :-)!

 

In the 1980's I was involved in finishing the construction of industrial projects that required particulate and toxic gas removal.  Because of public health concerns, after the Clean Air Act of 1966, particulates and noxious toxic gases from industrial processes had to be removed from effluent streams . 

 

It is these "regulations" that affected the cost of continued operation of existing coal fired power plants.  They can't compete unless they are free to pollute.  The prices of bag houses and electrostatic precepitators are too high.  (This is not CO2 these studies are addressing). 

 

If the political economics are reversed to permit coal plants to dirty the environment and sicken the population, then obviously, if one also assumes the capital costs are already paid for, eliminating the Clean Air Act reguirements would change the economics. 

 

But then, all we are doing in increasing the overall costs to society.  The cited studies acknowledge these  Clean Air Act costs are not included in its analysis and existing power plants are not economic if they are required to comply with the Clean Air Act rules on particulates and toxic gases.

 

I lived in this country when the particulate and toxic gas levels were their highest.  I doubt anybody who has experienced such conditions would want to  turn back the clock.  Folks in all the big cities in the US literally gagged from all cr*p in  the air.

 

For those younger, today's Beijing looks like what a world with no regulation would be.  China has horrible public health outcomes due to air pollution.

 

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