[Editor’s note: Mr. Graf’s cash flow analysis of wind power projects is presented as another view of the inappropriateness of planned public policy in the electricity sector. The economics of wind power is a broad topic; previous posts at MasterResource are listed at the end of this post. For general problems of industrial wind, see here.]
There are many arguments to be made against government subsidization of industrial wind power, some objective and others subjective. We hear about noise, shadow flicker, disruption of wildlife, lack of consistent energy output (intermittency), questionable performance with respect to pollution reduction, and undesirable aesthetic appearance.
It occurs to me, however, with regard to subsidies for energy ventures and technology, three things must be kept in mind:
(1) any good investment must be made in worthwhile ventures that can show a reasonable return;
(2) arbitrarily subsidizing some ventures may cause inadvertent (or advertent) exclusion of others; and
(3) jobs cannot be created by subsidizing ventures that do not provide a viable return.