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When Government Tries to Pick Winners

Folks like Barrack Obama have decided that wind power is the answer.  They haven't studied the numbers or really done much to investigate the technology, and god forbid that they have put any of their own money into it or run a company trying to make thoughtful investment decisions.  But he's just sure that such alternative energy technologies work and make sense because, uh, he wants them to.

But when government picks winners, disaster almost always follows.  Oh, sure, the programs themselves get a lot of positive attention in the press, and people are happy to line up to accept subsidies and tax rebates.  But the result is often this:  (ht: Tom Nelson)

According to the Massachusetts Technology Collaborative, the agency that oversees the state’s major alternative energy rebate programs, the small wind initiative was canceled because the turbines it has funded are producing far less energy than originally estimated.

An MTC-sponsored study released earlier this summer found that the average energy production of 19 small turbines reviewed was only 27 percent of what the installers had projected. The actual production for the 19 turbines, which received nearly $600,000 in public funding, ranged between 2 and 59 percent of the estimates.

A $75,663 turbine at Falmouth Academy that received $47,500 in state money, for example, has produced only 17 percent of the projected energy in the year since its installation. Another, smaller device in Bourne is producing only 15 percent of the originally estimated energy.

So the state government funds 2/3 of the project and the project still doesn't make sense

Mr. Storrs criticized the state for dropping the rebate program, which over two years has covered upward of half the cost of several turbines on Cape Cod and dozens of others throughout the state, saying, “It is not what you would hope a progressive [state] like Massachusetts would cancel. You would hope that they are supporting alternative sources of energy.”

Actually, he is correct.  Sinking hundreds of thousands of dollars into faulty technology for terrible returns based solely on the fact that a certain technology is somehow politically correct is exactly what I too would expect of a progressive state like Massachusetts.

The state board complains that the technology choices and siting decisions were wrong.  Well, who would have imagined that investors in certain projects would be lax in their engineering and due diligence when the government was paying 2/3 of the freight, and when the main reason for the projects was likely PR rather than real returns?

If the bit about PR and political correctness seems exaggerated to you, check this out:

During the hearing on the proposal two months ago Mr. Storrs told the planning board that the project was meant in part to help educate the public about wind energy. Town Planner F. Thomas Fudala said it would be informative to see whether the roof-mounted ones actually work. “Even if this fails, it will be useful information,” he said.

Mr. Storrs responded, “I know that sounds weird, Tom, but you are absolutely right.”

Wow, I bet this kind of investment decision-making really give the local taxpayers a big warm fuzzy feeling.  By the way, this article also includes an example of why Al Gore and others proposing 10-year crash programs to change out the entire US power infrastructure are impossibly unrealistic, even forgetting about the cost:

Mr. Storrs said he first ordered the Swift brand turbines last year as part of a bulk order along with the Christy’s gas station in West Yarmouth.

But the planning board had already adopted its new turbine regulation, which, in part on the advice on Ms. Amsler, had prohibited the roof-mounted machines.

“The town was just trying to be responsible in terms of looking out for its residents, trying to make sure these things are not going to pop up everywhere if they aren’t going to work,” said Thomas Mayo, the town’s alternative energy specialist.

At Mr. Storrs request, however, the planning board then went back and reconsidered its regulation. After a public hearing featuring testimony from Ms. Amsler as well as from a representative of Community Wind Power who argued that the Swift turbines work well and as advertised, the planning board decided to change the bylaw and allow Mashpee Commons to move forward with its project.

The Mashpee bylaw requires a return on investment plan, a maintenance plan, as well as proof that the proposal meets several safety and aesthetic prerequisites.

Town Meeting adopted the new bylaw in May, Mashpee Commons quickly filed its application, and received a special permit in early June. During the comment period for the special permit, the state program was suspended.

After receiving the special permit, Mr. Storrs said he applied for Federal Aviation Administration approval, which is required for any structure over three stories in town. More than two months later, he said he is still awaiting that approval.

Mr. Mayo said the town’s application for FAA approval of a site under consideration for a large municipal turbine took six months to approve.

Posted on September 2, 2008 at 12:03 PM | Permalink

Comments

Even if wind were realistic, how long would it take the AGW crowd to start whining about the evils of it? After all, wind is caused by pressure differences, and pressure differences are caused by temperature differences, and [sarcasm]we all know how sensitive the Earth Goddess' climate system is[/sarcasm]. If you take away "her" ability to distribute the sun's energy, she could drown us all with the icecaps...or something.

Posted by: Zach | Sep 2, 2008 1:27:37 PM

Never found out who said this, but it is soooo true:

"Everybody makes mistakes once in a while, but to really screw up, you need the Government."

Posted by: Frederick Davies | Sep 2, 2008 4:55:18 PM

I am learning more about Government Issues from a very informative site www.democracyconservator.com

Posted by: Chrissy | Sep 2, 2008 5:36:27 PM

I wouldn't make fun of the guy for saying that we can learn from failed projects - that really *is* how a lot of good innovative engineering gets done. I know I learn more from my failures than my successes...

However, the part missing is the part where they *admit* that the project failed, and then go into a "lessons learned from the failure of this particular wind farm" discussion.

Posted by: David B | Sep 2, 2008 7:40:24 PM

"If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand." -- Milton Friedman

I think he was being generous...
tom

Posted by: tomw | Sep 3, 2008 5:31:51 AM

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