Discussing Energy Economics on the Internet

To Green, or Not To Green?

Posted in California,Renewables,Texas by Cheryl Morgan on the November 25th, 2008

Things have been a little quiet here of late due to pressure of work on other projects, but while I have been busy various other things have been going on:

  • Governor Schwarzenegger committed California to a target of 33% renewable generation by 2020;
  • Mike Giberson complained about excess wind capacity causing negative prices in Texas; and
  • I received a fat document from the Cato Institute railing against the evils of renewable energy subsidies.

I’m not paying much attention to the Cato rant. As usual with such things it highlights all of the problems with the issue under attack while conveniently turning a blind eye to any problems associated with the big businesses whose entrenched interests Cato is trying to protect.

Giberson is much more even handed, but I find myself wondering whether asking for perfection in government action is wise. Of course other forms of generation get subsidies too – sometimes very well hidden, but they are there. If you try to take those subsidies away the companies that enjoy them will complain about being victimized. And of course we really ought to focus on the problem in hand, but if that means taxing something then the voters will get mad. Government interference is, I suspect, inherently inefficient, but if we want something to be done about climate change then governments need to prod markets into action.

Still, there are always things that can be done, and here is a paper on how real time pricing might reduce the problems that wind generation causes.

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