Government and wind

The argument in favour of massive government subsidies for alternative energy sources is simply that we won't get these new energy sources started up without government help. Government money is needed to work through the early growing pains, so to speak.  Without government assistance, we won't have these alternative energy sources ready to go, with sufficient output, when we really need them.

The counter argument is that the point "when we really need them" will be when oil is so scarce and expensive that these alternative energy sources will be competitively priced without the need for government subsidies. This switch over will happen all on its own, eventually and naturally (but perhaps not smoothly.)

An article in The Economist ("Wind of change," Technology Quarterly, December 6) explains the evolution of wind energy, and makes a good argument in favour of government incentives. The first "wind farm" was built in California in the 1980s with "generous tax credits," the article says. Those windmills were small by today's standards, with a rotor diameter of 15 metres (50 feet) and output of tens of kilowatts. New machines have a capacity of 1.5 to 2.5 megawatts and rotors up to 100 metres (330 feet) across. And turbines on the drawing board have capacities close to 10 megawatts. Wind energy currently accounts for one per cent of total global energy capacity, but a Danish research firm, BTM Consult, forecasts that will jump to 2.7 per cent by 2012 and six per cent by 2017, the article says.

Wind energy is still highly subsidized, but it taps into an energy source that doesn't have the political/ethical baggage of, say, oil and grain-based ethanol. "Wind power is attractive because it is a widely available and renewable source of energy that produces neither pollution nor climate-changing greenhouse gases," the article says.

The "big picture" message I took from the article is that countries that take a lead on subsidies can sometimes spawn some really successful private companies that lead the world in their fields. Denmark derives 20 per cent of its energy from wind. It was almost entirely dependent on foreign oil for its electricity, and after the oil price spike in 1973, the Danish government "embarked on an ambitious research project to develop the technology," the article says. Now some of the best wind turbine engineers are from Denmark. And Vestas, the leading manufacturer of wind turbines, is a Danish company. If the growth in wind energy production around the world grows as fast as BTM Consult predicts, Vestas products and Danish engineering know-how will be in high demand.