Sometimes government actually has a role to play. With well over $2 trillion in corporate bucks parked idly and essentially doing nothing of productive value in the US, why not put it to work? Unfortunately, once money gets laundered through banks to other banks and to still other banks, interest rates get absurdly idiotic and usurous. And by then, many projects are no longer economically viable…..
But, with regards to financing green energy, as long as the scheme is not bogus and it has long term viable prices for the produced power, green energy bonds are really popular, even in the aftermaths of the massive frauds in housing and “financial products” – see here for and example:
However, the aftermath of the massive US bankster scams (and new ones like this: http://www.nakedcapitalism.com/2012/06/quelle-surprise-barclays-settlement-on-liboreuribor-fixing-illustrates-bank-crime-pays-well.html and http://www.nakedcapitalism.com/2012/06/london-whale-trade-explodes-current-estimate-of-jp-morgan-losses-as-high-as-9-billion.html) which then get/got transferred to Europe and elsewhere still linger on. Supposedly German banks can’t finance much more than half of the offshore wind and other renewable investments needed to replace the nukes Germany is phasing out of existence:
Recently, NY City municipal bonds due in 2045 at 3.25% were offered for sale. The money from the sale of these bonds will be used to finance the sewage plant improvements and more water delivery. For an offshore wind farm in the Great Lakes rated at 500 MW, using such money would provide a Capex cost of 6.8 cents/kw-hr! That would work out to a production cost less than 8.5 c/kw-hr… That’s the power of long term low interest loans for capital intensive projects. Such a $2.25 billion project would make 35,000 job-yrs of direct employment, about 70% of which are not related to the manufacture of the actual wind turbines…
Of course, the reason that German banks don’t have enough money to finance their offshore plans is because they blew it on US, Irish and Spanish (and similar) real estate speculation, or else the likes of Goldman Sachs just took them to the cleaners with gambling on commodities like oil price futures or derivatives and derivatives of derivatives. And then, looking for safety, they went and invested in Sovereign Bonds. Oh well, as WC Fields said when asked whether the card game he was playing was a game of chance, the ever so truthful answer was “not the way I play it”. Of course, those banks can’t explain to the German workers where so much of the money that came from the incredible productivity of German industrial workers went. But they (banksters) are really good at the politics of deflecting blame onto others – some even claim they more or less can purchase the media access to make the public think theses banks are essentially blameless in this matter. Wow, a magic trick!
But meanwhile, the capital demands of offshore wind are what they are – about $4.5 billion per GW of capacity. Recent performances of turbines in the North Sea have been extraordinary – over 50% of rated capacity for the Alpha Ventus (60 MW) project, for example. That is how Germany needs to make up for the 22 nukes they are going (or say they are going) to shut down by 2022, as PV is too expensive and just won’t do for the 60% of days that are overcast as well as when its nighttime. The North Sea has the wind resource – winds average 10m/sec, and calm seas area rarity. But, offshore wind turbines don’t grow on trees, and this is a capital intensive, high skill labor requiring renewable energy project. So where’s the money? No money, no turbines, no turbines, no electricity, and no electricity, no civilized society in Northern Europe (and lots of places). Oh well…. In this big game of poker, somebody’s hand just got called…
Meanwhile, in Japan, their newly legislated Renewable Energy Feed-In Tariff (FIT) goes into effect on July. Due to Fukushima their economy has taken at least a $50 billion hit, and at best only two of the 54 nukes (50 of which are operable, 3 that are meltdowns and one that is pretty thoroughly trashed) are likely to be in operation for the peak of the summer, when electricity demand is at a maximum. For them, a massive installation campaign of PV will produce immediate relief from their “peak electricity crisis”. And this will be facilitated by the very high price offered for PVs for the first year. By next year, Japan is likely to be the country with the highest PV installation rate. And most of these PV systems are likely to be “Made in Japan”, too – that is the probably real intent of the FIT law, which is to kick start the Japanese economy. By next year, longer lead items like wind turbines and geothermal systems are also going to be undergoing a “boomlet”:
By offering high prices (“a premium”) for rapidly installed renewable energy systems (especially PV), lots of investment can occur rapidly, and lots of installation labor can be used up. In addition, lots of expansions of existing PV manufacturing plants also can rapidly happen (demand stimulates production), and this will also generate lots of construction and supply chain business. Because it is Japan, it is unlikely that imports will be used to any significant extent, despite the tremendous worldwide glut of manufacturing capacity (worldwide sales = 30 GW/yr of capacity, worldwide manufacturing capacity = 60 GW/yr). After all, importing the PV product is not economically stimulative…., and instead is an economic drain in a country with too much labor and too little work for those workers. Several Japanese companies are already leaders in PV manufacturing, including Kyocera and Sharp.
Within a year, Japan is also likely to be undergoing a boom in wind turbine installations (wind sourced electricity is much less costly than PV, and Japan is a pretty wind resource rich country, especially offshore). They may also rapidly become world leaders in floating offshore wind farms, because the available shallow wind waters are fairly limited in Japan (waters get really deep really fast in the Pacific and in the Sea of Japan.
Of course, we could use some “economic boomlet” in WNY, too. Especially with regards to projects that decrease our consumption of polluting fossil fuels and nuke based electricity. So far, using the FIT approach with regards to energy appropriate for WNY (biomass, biogas and wind turbines) seems to be one of the best approaches available to us….