[Update: Germany Stops Fighting Arithmetic and Ramps Up Construction of Economically Sensible Power Generation]
Two years ago we looked at the claim that wind generation can save money for power pool customers. We found that the supposed savings could be realized only if the elephant in the room – the above-market feed-in tariffs – were ignored.
In other words, the total amount spent on electricity purchases from a power pool was augmented by the additional amounts consumers pay to fund the feed-in-tariff (FIT). As long as wind generators can bid a low price but receive the higher FIT, then they have an incentive to underbid, thereby reducing pool prices, but not overall costs.
In addition, we looked at what an economically least cost system might look like in Germany over the next ten years. …
“Energy is the master resource, because energy enables us to convert one material into another. As natural scientists continue to learn more about the transformation of materials from one form to another with the aid of energy, energy will be even more important.”
– Julian Simon, The Ultimate Resource 2 (Princeton: Princeton University Press, 1996), p. 162.
Energy is the master resource, as Simon says. Even anti-energy zealots have admitted as much in their more sober moments. “A reliable and affordable supply of energy is absolutely critical to maintaining and expanding economic prosperity where such prosperity already exists and to creating it where it does not,” Obama’s science advisor John Holdren once said. (1)
UK Energy Trouble
The indispensability of affordable, plentiful energy has come to the fore as anti-energy policies have collided against human needs.…