Hawaii – Land of Crony Capitalism

Wikipedia defines crony capitalism as an “allegedly capitalist economy in which success in business depends on close relationships between businesspeople and government officials.” Crony capitalism has sadly played an important role in state and, especially, local government for just about ever. But Hawaii suffers from a particularly strong case.

Hawaii’s history of crony capitalism dates back at least to the mid-1950s. Before then, the future state was run by an oligarchy consisting of the Big Five land-owning companies and a sixth company that was mainly involved in construction. The oligarchy ran the political, economic, and social system of the entire territory in a system that would be considered more feudal than crony capitalistic. Nearly all of the private land in the islands was owned by one of these companies or a relative handful of other families, companies, or trusts, leaving only about 3 percent of the state available for fee simple ownership by ordinary residents.

That began to change in 1954, when reform-oriented Democrats, bolstered by the votes of children of immigrant workers from Japan, China, and the Philippines, took control of the legislature for the first time in the territory’s history. Among other things, the Democrats promised land reform so that more land and opportunities would be available to the average person.

As George Cooper and Gavan Daws showed in their classic 1985 book, Land and Power in Hawaii: The Democratic Years, the main beneficiaries of the reforms imposed by the legislature were the legislators themselves, not their constituents. The Big Five may have lost political power, but they continued to control the land and development by including powerful Democrats in every land deal. Cooper and Daws painstakingly reviewed thousands of development projects and found that traditional developers simply partnered up with the Democrats in deal after deal. In some cases, the legislature would pass a law benefitting one of the oligarchs and, within days, the members of the legislature who worked hardest on the bill would have their names included in a new deal.

One of those legislators was elected U.S. Senator when Hawaii became a state, and today is the second-longest serving senator in history. From his post as chair of the Senate Appropriations Committee, Senator Inouye makes sure that plenty of pork reaches his state.

Evidence of Hawaii’s crony capitalism can be seen in Honolulu Mayor Mufi Hanneman‘s push for a horrendously expensive and totally unnecessary 20-mile rail line that is projected to cost more than $200 million per mile. Since all of Honolulu’s electricity comes from burning fossil fuels, the rail line will do nothing to save energy or reduce pollution. But Mayor Hanneman hopes that it will propel him into the state governor’s office, for which he is running right now.

Saddle Road on the island of Hawaii. Click for a larger view.

The Antiplanner may have enjoyed another example of Hawaii’s crony capitalism on the Big Island. During a long bike ride from Hilo to Waimea, I could not help but notice that the state was widening the two-lane road into a road that must have been 60 feet wide but was still striped for only two lanes. I certainly enjoyed the extremely wide shoulders that, even with rumble strips, could comfortably fit four cyclists riding abreast. But why did they need so much asphalt when, say, 44 feet — two fourteen-foot lanes and two eight-foot shoulders — would have been more than adequate. Even in the unlikely event that traffic should someday justify four lanes, the rumble strips mean that the state would have to repave them before restriping them. It makes me suspect that this project (described on page 3 of this document) is somehow a gift to local contractors.

Crony capitalism presents a problem for liberals and libertarians alike. Left-wing reforms give government more power, which gives incentives for corporations and the wealthy to manipulate that power to their own benefit, with the result that the reforms have exactly the opposite of the goal of bringing power to the people.

Libertarians believe government should consist of a few basics, such as police and courts, needed to protect people and their property, leaving everything else the private sector. But places with minimal governments — such as America in the nineteenth century — saw plenty of crony capitalism. Meanwhile, Transparency International’s corruption perception index lists several big-government countries, such as Denmark and Sweden, among the least-corrupt countries in the world. (The United States is ranked 19; note that the index only measures perceptions of corruption, not corruption itself.)

To the extent that the index is meaningful, perhaps it means that corruption has less to do with the size of government than with the other checks-and-balances built into the government. If so, then someone should identify which checks-and-balances do the most to minimize crony capitalism and push to build those in to our system.

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81 thoughts on “Hawaii – Land of Crony Capitalism

  1. Dan

    Not making $hit up about your rhetoric, Dannyboy. Your comment on peak oil came right out of left field, a quantum diversion from prk’s points and questions.

    That assertion would be utterly and completely devastating to my position and credibility had I not brought it up two days before the prk comment you pretend to like.

    Of course, it is the simplest thing to comprehend that my position days ago was replacement energy sources are an imperative, and massive fossil fool subsidies prevent progress. It is as simple as retracting and extending a finger on the scroll wheel to cause the screen to move upward.

    It is also the simplest thing to comprehend that the IEA was seemingly deliberately underplaying proven reserves, as anyone paying attention already knew years ago. That the IEA finally is on board is evidence the obfuscation can no longer be supported.

    DS

  2. Frank

    It’s also as simple as hitting ctrl+f and typing peak oil and finding that phrase had not been used since #7. As I was interested in hearing a response to prk, #41 still comes across as a massive evasion.

    It’s also the simplest thing to troll a blog and argue from repetition and use the tautological phrase “small minority” dozens of times and to accuse others of being ideologues over and over and over and over while ridiculing anyone who doesn’t share your ideology.

  3. Scott

    Frank, (& others) It’s almost useless to have to have a discussion with Dan. He back-pedals, avoids, is way vague, has no real position, tries to rely on certain ambiguous emotion-laden words & is basically meaningless.

    For this case about peak oil, he doesn’t even realize that he brought it up, with no connection to developing resources & I doubt he even fully understands its meaning, which is rather irrelevant anyway. Price of extraction & alternative energy sources is the big issue.

  4. Dan

    Frank, prk and others harrumphed about my choice of ‘cheap energy going away’ vs ‘peak oil’, which I guess is easier to reflexively identify through the angry and victimized red haze of cognitive dissonance. But keep waving your arms around.

    And if the best you can do is try and hand-flap as in 52, it is the simplest thing to consider that others have the motor skills allowing retracting and extending a finger on the scroll wheel to cause the screen to move upward. This allows examination of whether the silly assertions in the last para are based in fact or flailing.

    Physics works on this planet. No one says wind is a 1:1 replacement, nor does anyone here care to admit here it kills fewer birds than fossil fool/mW, windows, cats, cars, power lines, or other human endeavors. Governments massively subsidize highly profitable and damaging fossil fuel, distorting energy markets and lulling society into complacency about developing needed alternatives.

    No amount of cornucopian wishing, hand-waving, mischaracterizations, blatant and simplistic distractions, false assertions, or cognitive dissonance can erase these facts from this thread. The arm-waving here is just like when I ask for evidence about UGBs, discuss wildland fire/land use preferences/etc – the same characters do the same thing as found above. It’s like…oh…repetition or projection or something akin to normal human reaction to cognitive dissonance.

    DS

  5. Frank

    Dan, you’re evasive. You apparently have low reading compression or you’re just trolling, skimming, looking to attack. You’re the one who brought up bird strikes. No one else did. Maybe in your haste to dismiss virtually every comment on this and every other thread here, you mistook “bat” for “bird”. Did you click the link I provided and watch the OPB video? I doubt it. You’re posting from work, your government job, and your many bosses probably don’t look too kindly on you watching videos on the taxpayer dime. That might also explain your inability to respond substantively to legitimate concerns and your need for quick evasions and attacks.

    I have never said that oil isn’t subsidized. What I stated, and what you cavalierly dismiss or fail to discuss—due to your cognitive dissonance or your aberrant compulsion to attack—is that wind is not green. It kills tens of thousands of bats. That’s not an endorsement of fossil fuel, and if you were here for anything other than a drive by while surfing at taxpayer expense, you would know that I have never championed fossil fuel on these pages. But instead, you conflate various comments and distract with a red herring, an irrelevant thesis. “Oil kills more birds and puddy tats.” BFD. I wasn’t comparing wind to oil; I was discussing one negative externality of wind, one that should preclude the use of the word “green” with “wind power”, one that should be seriously considered and discussed. You twist this assertion into endorsement of oil and use it to attack every commenter on the site who doesn’t agree with you.

    If you think Randall and the people who post here are stupid and you are so irked by their cognitive dissonance and small minority ideology, WTF do you spend so many work hours “reading” the articles and post comment after comment after comment that you know will fall on deaf ears?

    That’s not a rhetorical question. I’d really like an answer.

  6. Borealis

    Even though he is the most prolific poster on this website, I haven’t seen any discussion with Dan that results in anything enlightening or clear. It always seems to devolve into name calling or vague references (though I have to admit I have stopped reading Dan so there might be some exceptions).

    I enjoy reading most of the other pro-planner posts, however.

  7. Scott

    Dan has just again proven how meaningless & non-substantial his comments are. His previous post had no discussion value.
    I think he was accusing people of dancing & yelling.

    Imagine Dan as a lawyer. All of his clients would lose.

    Dan, do you care to add anything about how expensive oil needs to get for alternatives to be economically viable on a large scale?
    And how technology will advance?
    How will solar & wind sources power a large portion of vehicles?

  8. Dan

    The key to understanding either the competence or mendaciousness on this board:

    You’re the one who brought up bird strikes

    Frank is either lying through his teeth or making sh– up for some reason.

    Either way, we see the flailing about and making sh– up again to cover up uncomfortable reality. A reality that does not comport with or listen to a particular worldview. Anyone with two firing brain cells can see the standard pattern at work here.

    DS

  9. Frank

    You’re the one who brought up bird strikes

    Frank is either lying through his teeth or making sh– up for some reason.

    Use your scroll wheel, Dannyboy, and scroll up to 31 and read closely. Then ctrl+f and type bird with your widdle fingie wingies and you’ll find 31 where you wrote “compare, say, bird deaths at wind farms to bird strikes on cars. Or bird deaths by housecats.”

    Anyone with two firing brain cells can see the standard pattern at work here.

    You’re right here. And thank you for evading my question and providing another example of my observations in 55. That you believe everyone here is incompetent or can’t see your absolute truth (love the use of “mendaciousness”, you sesquipedalian, you) and yet you still troll the site provides an interesting contradiction. So I’ll pose my question to you again and will continue until you respond:

    If you think Randall and the people who post here are stupid and you are so irked by their cognitive dissonance and small minority ideology [and you think that they are incompetent liars], why do you spend so many work hours “reading” the articles and post comment after comment after comment that you know will fall on deaf ears?

  10. rob

    Frank and Dan. Please refrain from additional personality discussions and re-read Randal’s conditions for posting comments:

    “Please feel free to submit comments. Constructive debate is welcome. Ad hominem attacks and name-calling will reveal the shallowness of the author. Foul language may be deleted.”

    You are both correct, Frank brought up bat strikes against wind turbines which morphed into birds when Dan was later responding. A simple switch of terms, no need to attack each other.

  11. Frank

    rob:

    I’d be glad to, and I appreciate your policing the site.

    My tone and choice of words is in response and a mirror of Dan’s. This goes far beyond birds and bats. Please scroll up, and for that matter peruse comments on virtually every post, and you’ll find attacks and name calling like “pet crazies”, “lunatic fringe”, “silly commenters”, and “Anyone with two firing brain cells”. And that’s just this one thread.

    I, too, would like the attacks to stop. I would like the judgmental language to stop. I would like the domination of the conversation by one individual to stop. I read the AP and its comments to learn from them, but when one person dominates the conversation with repetitive name calling and attacks, it makes me not want to read and/or participate in what should be a civilized discussion.

    I’ve suggested it before, and I’ll do it again: it would be nice if comments on this site could be filtered by users, like Facebook does, so that users who engage in judgmental attacks can be hidden by people who don’t want to see it.

  12. Scott

    Dan, Maybe some only have 1 firing brain cell & cannot understand your coded, nonsensical, indeterminate, vague rants. Enlighten us, guy with 3 firing brain cells.

    In addition to you continually using fallacies to try to–not sure what you try do. It’s probably a self-esteem thing–you do obviously lack comprehension & communication skills. That’s not intended to just be insulting. All here agree. It’s an attempt to get you to step back & think & consider whatever you are trying to say, and express ideas in a mature, cognizant, persuasive, coherent, sensical way

    What’s the relevance about fan blades killing animals?
    What does increased oil price (~peak oil) have to do with wind & solar?
    How can wind & solar power vehicles, they way oil does?
    How will LRT reduce emissions? (“Reducing car trips” is not a sufficient answer)
    What does your perception of comment posters moving their hands have to do with anything?
    Why do you consistently try to attack the person & use vague generalities, rather than discuss issues?
    Overall, what’s your point?
    How is gov force going to “save us”?

  13. prk166

    “Frank, prk and others harrumphed about my choice of ‘cheap energy going away’ vs ‘peak oil’, which I guess is easier to reflexively identify through the angry and victimized red haze of cognitive dissonance. But keep waving your arms around.
    And if the best you can do is try and hand-flap as in 52, it is the simplest thing to consider that others have the motor skills allowing retracting and extending a finger on the scroll wheel to cause the screen to move upward. This allows examination of whether the silly assertions in the last para are based in fact or flailing.
    Physics works on this planet. No one says wind is a 1:1 replacement, nor does anyone here care to admit here it kills fewer birds than fossil fool/mW, windows, cats, cars, power lines, or other human endeavors. Governments massively subsidize highly profitable and damaging fossil fuel, distorting energy markets and lulling society into complacency about developing needed alternatives.
    No amount of cornucopian wishing, hand-waving, mischaracterizations, blatant and simplistic distractions, false assertions, or cognitive dissonance can erase these facts from this thread. The arm-waving here is just like when I ask for evidence about UGBs, discuss wildland fire/land use preferences/etc – the same characters do the same thing as found above. It’s like…oh…repetition or projection or something akin to normal human reaction to cognitive dissonance.
    DS”

    Dan, what I am “harrumphing” about is that by it’s very nature, wind producing nearly bupkiss for energy. How can something that produces nearly nothing replace anything? It’s like buying a real doll to replace a flesh and blood wife. Please explain exactly how wind is going to overcome it’s natural behavior of rarely blowing in order to replace solar, coal, oil, nuclear, et al.

  14. Dan

    Dan, what I am “harrumphing” about is that by it’s very nature, wind producing nearly bupkiss for energy.

    This is patently false. If it were true, companies wouldn’t be investing and scientists (I know, I know: science on this site is dependent upon your worldview…) and analysts wouldn’t be planning for wind as a fraction of the replacement energy for carbon-based fuels.

    Almost every G20 nation is in front of the US on this. China is, today, appropriating much of the resources in this sector and likely will be far ahead of us within a decade. China.
    ——————-

    And if someone rejects the reality of basic physics to the point of repeatedly ululating long-ago refuted falsehoods and asserting people who state basic physics are in on a world-wide conspiracy, that person is not well. ‘Crazy’ is within the spectrum of diagnosable conditions. ‘Lunatic fringe’ would be assigned to anyone stating similar with a different topic. Not hard to grasp at all. Uncomfortable to grasp, surely.

    DS

  15. Scott

    Dan, It would be great if wind could produce plentiful energy. You seem to think that people are against it for some non-existent reason. If wind was more steady, powerful & economical, it would be already be used more often.

    You avoided many questions & challenges.

  16. rob

    For those interested in how wind energy may play a part in substituting other fuels, here is summary of a total energy strategy developed by the Rocky Mountain Institute (http://www.rmi.org/rmi/Library/2004-08_WTOEExecSummary). The logical fallacy in arguing against wind power because it is not always blowing is ignoring incorporation of sufficient geographically distributed wind generating capacity contributing energy to the grid. As long as the wind is blowing in at least one of the harvesting locations, energy will be continuously generated. This is not to say, of course, that this may be the most cost effective or optimal strategy for energy production, but the argument that wind is not sufficient because wind is intermittent should be reconsidered. Wind power generation is being used more at present than in the recent past, and more capacity is coming online, but without the incorporation of massive efficiency gains through the system, it will not be a sufficient replacement for any other singular fuel at current levels of energy use. However, the potential efficiency gains in the current energy consumptive system are, according to RMI, so extensive that the largest and most cost effective potential “production” capacity is reducing energy demand through efficiency.

  17. prk166

    “This is patently false. If it were true, companies wouldn’t be investing and scientists (I know, I know: science on this site is dependent upon your worldview…) and analysts wouldn’t be planning for wind as a fraction of the replacement energy for carbon-based fuels.”

    Patently false? I’m sorry, how is saying that wind power is intermittent “patently false”? Do you live in a wind tunnel and never leave? Does the wind blow all the time? All the time at the same velocity?

    If it’s a patently false to say the wind doesn’t blow all the time, why are the annual outputs for wind farms 15-30% of their name plate ratings (aka capacity)?

    You do realize that you linked to a map that uses a scale that rates the wind relevant to, well, itself, doesn’t prove that wind is viable. It only shows that there are a few select areas of the US where the wind blows a lot more than others. Mexico may look very wealthy when compared to Malawi and Bangladesh but that doesn’t mean Mexico is rich.

    Plans for new wind power projects doesn’t mean that wind is a viable source of energy. Many states with growing power needs have created renewable requirements. Colorado’s is 20% by 2020. California’s is 30% by 2020. Public utilities, government backed monopolies, have no choice but to build these projects.

    If wind can be counted on to by, why has Texas electrical council – and note that Texas is first in the US and if Texas were a country it would be the 6th highest in the World with installed wind name plate rated capacity – has pegged wind’s capacity factor to be under 9%. Yes, under 9%. If wind is so reliable how does it represent 10% of electrical generation capacity in Texas but only produce 5% of it’s electricity? Are the wind turbines down for maintenance 50% of the time? And if wind is reliable why do wind farms in Texas pay grid operators, yes pay grid operators, to take their electricity 20% of the time?

    IF wind power is so wonderful why aren’t they held to the same rules as other power generators and required to make payments when they fail to deliver promised power?

    Speaking of Texas, if wind is realiable than why have they had to enact power emergencies when wind power generation has suddenly and sharply dropped, often times by 60-80% in less than a couple of hours?

    If wind isn’t intermittent by nature than why in the summer of 2006, at the peak of power demand, did California wind turbines only produce 10% of the electricity of their capacity? And why was it only 17% in Texas? Why did does Denmark have days, and as in 2003 an entire week, when virtually no wind power is generate?

    As for China, if wind is so great then why is the Chinese government, which as you mentioned is pushing to be a leader in Green tech , simply building wind and only wind for power generation? Why are they building wind projects like Gansu with 12MW of wind capacity….. along with another 9 1/2 MW of coal generation?

    As for China being ahead, so what? Nearly all of the rare earth elements – dysprosium, lanthanum, neodymium, et al. – that things like wind power can not exist without. If they want to be leaders, all they have to do is end exports of those raw materials. They have already decreased their already tight export limits on those materials.

    So again, exactly how do we address wind’s problem of being highly variable?

  18. Dan

    Patently false? I’m sorry, how is saying that wind power is intermittent “patently false”? Do you live in a wind tunnel and never leave? Does the wind blow all the time? All the time at the same velocity?

    Again, you again are not again addressing the issue. Again.

    The assertion was that by it’s very nature, wind producing nearly bupkiss for energy that I responded to and asserted was false (thus the passage I italicized). Not the wind power is intermittent “patently false” assertion I never made, and indeed acknowledged upthread. However intermittency is a red herring, and total wind power share continues to grow despite harrumphing assertions that intermittency makes wind a non-starter.

    The utterly basic knowledge that rob addresses in his link is a good start to be able to speak to the issue, as is the realization that capitalists want in. And, as inferred upthread, the world is having intermittent trouble supplying wind parts.

    I guess they didn’t seek the counsel of commenters on this board to see the folly of their plans!

    DS

  19. Andy

    Wow, Dan. The world went from 0.01% to 0.02% wind power in only ten years. The growth is incredible, just like the sale of fireworks skyrocketed between May and July this year. At that rate wind will provide all the power in the world and more in 170 years. That is mathematics, though not physics.

    And if you want to be concerned about physics, then you would understand that wind is a terribly inefficient source of power. Once wind power became significant, such as more than 10%, you would have to build all the other generators to fill the full demand anyway for times when the wind doesn’t blow, and they would have to be ready at a moment’s notice.

    You can’t store a significant amount of power (other than pumping water upstream, which is a loss of about 80%), so all the high wind events are worthless.

    Wind has its place, as a small source, or a remote source. But you can’t write a model that makes wind more than a minor contributor in a modern urban setting. And think about what would happen in extreme events… all the power for a whole region of a country would depend on very long distance transmission lines that could accept maximum transmission. One persistent high pressure zone, or a prolonged El Nino, would decimate Southern California.

  20. prk166

    “Patently false? I’m sorry, how is saying that wind power is intermittent “patently false”? Do you live in a wind tunnel and never leave? Does the wind blow all the time? All the time at the same velocity?” -prk166

    “Again, you again are not again addressing the issue. Again.
    The assertion was that by it’s very nature, wind producing nearly bupkiss for energy that I responded to and asserted was false (thus the passage I italicized). Not the wind power is intermittent “patently false” assertion I never made, and indeed acknowledged upthread.” -Dan

    Let me make sure I’m understand you correctly, you’re quibbling that you said wind producing nearly bupkis was patently false? Is that correct? If you had an co-worker who only did work 4 hours a week, 10% of a 40 hour work week, would you say that they’re doing nearly bupkis? If not, what would you call it?

    ” However intermittency is a red herring, and total wind power share continues to grow despite harrumphing assertions that intermittency makes wind a non-starter.” – Dan

    Building wind farms can be driving by a lot of things. It doesn’t not make the interment nature of wind a red herring. As pointed out earlier, the Texas electrical council has pegged wind’s capacity factor to be under 9%. If one builds a wind farm with a name plate rating of 100MW that only producing 10MW of actual electricity, how do we make up for the other 90MW?

    Again, an unanswered question, if wind is so reliable how does it represent 10% of electrical generation capacity in Texas but only produce 5% of it’s electricity? Are the wind turbines down for maintenance 50% of the time? And if wind is reliable why do wind farms in Texas pay grid operators, yes pay grid operators, to take their electricity 20% of the time?

    “The utterly basic knowledge that rob addresses in his link is a good start to be able to speak to the issue, as is the realization that capitalists want in.” -Dan

    Again, there are a variety of reasons for some getting into the business. Would the IRS’s 5-year double declining balance accelerated depreciation for capital costs of wind farms, when other electric generating facilities must use 20-year depreciation not be a factor? That is, being able to deduct, to reduce, from tax payments $150 million over 5 years for a $300 million investment? How about another $100 million on top that for property tax forgiveness? And how about on top of that another $150 million in the federal Production Tax Credit? What about the local tax breaks on a project like that? They don’t factor in to the decision to build? How about other public funds that get used toward the project such as states like Minnesota and California where rate payers pay into the fund and the fund’s dollar go toward building such projects? What about the $3 billion from the Recovery Act that is up for grabs? Would that not factor in also?

    What about mandates that dictate they will be built? As previously mentioned many states have RPS’ legally mandating that X% of power will be from renewables. California’s is 33%. 30% of Colorado’s power is legally mandate to come from renewable sources by 2020. Would these not factor into why wind farms are being built?

    If wind isn’t intermittent by nature than why in the summer of 2006, at the peak of power demand, did California wind turbines only produce 10% of the electricity of their capacity? And why was it only 17% in Texas? Why did does Denmark have days, and as in 2003 an entire week, when virtually no wind power is generate? How exactly is that a red herring? How is that not a problem?

    ” And, as inferred upthread, the world is having intermittent trouble supplying wind parts.” – Dan

    That page you pointed to didn’t say they were having trouble supplying wind parts but “the industry is struggling to build a local supply chain”. It’s a young industry with an immature supply chain. How does this prove anything more than this is a young industry with an immature supply chain? More so, how does this indicate that wind doesn’t have an issue with reliability?

    “You can’t store a significant amount of power (other than pumping water upstream, which is a loss of about 80%), so all the high wind events are worthless.” -Andy

    That is a large part of the reason why iwnd farms in Texas pay grid operators, yes pay and not get paid, to take their wind electricity 20% of the time.

  21. Dan

    China Surges Past U.S., Europe in Clean-Energy Asset Financing

    July 13 (Bloomberg) — China attracted more asset financing in clean-energy technology in the second quarter than Europe and the U.S. combined, Bloomberg New Energy Finance said.

    Financing of wind turbines, solar panels and low-carbon technology in China climbed 72 percent to $11.5 billion compared with the year-earlier quarter, Bloomberg New Energy Finance said in an e-mailed statement. U.S. investments in clean energy rose to $4.9 billion while in Europe it fell to $4.5 billion.

    “China continues its extraordinary surge and Europe has suffered a setback according to our figures for asset finance in the second quarter,” said Michael Liebreich, chief executive of New Energy Finance. “Where investors are placing their bets is changing rapidly.”

    China’s $586 billion stimulus program, implemented last year and still being spent, and economic growth boosted industrial output and energy demand. The world’s most populous nation installed 14 gigawatts of new wind power last year, more than any other country.

    Huh.

    Wind Energy Investment of $65 Billion May Curb Carbon

    By Jeremy van Loon and Alex Morales

    March 22 (Bloomberg) — China WindPower Group Ltd., Iberdrola SA and Duke Energy Corp. will lead development of an estimated $65 billion of wind-power plants this year that let utilities reduce their reliance on fossil fuels.

    The estimate from Bloomberg New Energy Finance assumes a 9 percent annual increase in global installations of wind turbines, adding as much as 41 gigawatts of generation capacity. That’s the equivalent of 34 new nuclear power stations.

    Utilities that built natural gas-fired generators during the last decade are increasingly erecting turbines and buying wind power from competitors, tapping a renewable-energy source as governments consider ways to penalize carbon-based fuels.

    “Wind development is moving fast,” James Rogers, chairman of Duke, which owns utilities in the U.S. Southeast and Midwest, said in London on March 18 at the Bloomberg New Energy Finance conference. “In the last 10 years, 90 percent of plants we’ve built have been gas. I’ve used gas plants like crack cocaine.”

    While gas-fired plants are relatively cheap to build and pollute less than coal plants, they still emit carbon dioxide, which will carry higher costs if governments tighten environmental rules.

    Last year, $63 billion was invested in turbines, adding 37.5 gigawatts of new capacity and bringing potential output of electricity from wind to 157.9 gigawatts, according to the Global Wind Energy Council, a Brussels-based industry group. A third of those turbines were installed in China, which doubled its capacity to 25 gigawatts.

    ‘Scalability’

    Lower wind turbine prices mean more power for the same money, and developers are rushing to take advantage of $184 billion in economic stimulus money set aside for clean energy projects, said Mike O’Neill, president and chief operating officer of wind project developer Element Power.

    “We are getting low-cost, low-risk money into this market,” O’Neill said. “You are getting money coming in.”

    Making wind power even more attractive is its “scalability,” or the ease with which a developer can add turbines as demand rises, said Petra Leue-Bahns, chief financial officer of Ecolutions GmbH.

    “Wind is relatively easy to install in big packets and then scale up,” she said. “Wind will probably reach grid parity” and be able to compete with fossil fuels without subsidies within four years, she said. Ecolutions invests in renewable-energy projects in Europe and Asia.

    BP Plc, the world’s biggest oil producer, is investing in wind and solar power as renewable energy gains market share on fossil fuels.

    “If you want to have the same size of company that you have today, then you need to start the shift,” said Katrina Landis, chief executive of the London-based company’s alternative energy unit. “It means to some degree giving up what you’ve done for the last 100 years.”

    What. A. Shame.

    You need to get in the consulting biness puh-ronto, buddy.

    Countries are throwing away billlllyunnns on bupkis. Markets are moving fast on bupkis. You know something they don’t. It is your ethical responsibility to right this wrong. Markets simply don’t know. Tell them.

    DS

  22. prk166

    Just to make sure we’re on the same page Dan, you did mean to prove my point that what is driving this building is not that wind works but subsidies and tax payer money, right?

  23. Dan

    Your original point I italicized. I’m not aware all of a sudden your making a new point.

    Whatever this new, sudden point may be, I’ve already addressed the comparison between subsidies for FF and renewables, the fact that the FF subsidies distort the markets, and basic concepts of wind energy.

    DS

  24. prk166

    Dan, don’t play dumb. YOu may be daft but you’re not an idiot. You’re claiming that the fact that people are building wind are because it works; that it means that the variability of wind is a moot but. But they’re not. There are huge financial incentives to build wind farms. And in many situations, state laws mandate that renewable be used irregardless of their efficiency.

    I’m not sure why you keep bringing FF subsidies into the issue of the variability of wind and how it can be overcome. FF subsidies don’t cause the wind to not blow most of the time in most of the country.

    Again, an unanswered question, if wind is so reliable how does it represent 10% of electrical generation capacity in Texas but only produce 5% of it’s electricity? Are the wind turbines down for maintenance 50% of the time? And if wind is reliable why do wind farms in Texas pay grid operators, yes pay grid operators, to take their electricity 20% of the time?

    The wind doesn’t blow all the time. That’s why annual outputs for wind farms 15-30% of their name plate ratings. How do we over come this? What do we do for power most of the time when wind doesn’t blow?

    When the Bonneville Power Administration faced a week and a half in Jan 09 where the wind didn’t produce any electricity, what were they to do? Right now every megawatt of wind power that is added to the system is backed up with a megawatt of gas-fired generation, how does that make wind efficient? How does that mean that the intermittent ways of wind is not an issue? If it’s not an issue, then why the need to double up on NG production capacity? IF wind’s's variability isn’t an issue, then why did Xcel Energy just a year and half ago refer to the costs of integrating wind to be “the ineffeiciency of generation due to wind generation uncertainty”? Are they just making things up?

    Again, how do we get around winds fundamental issue of extreme variability? What is to be done to overcome this and at what cost?

    Please speak to this.

  25. Dan

    I’m not sure why you keep bringing FF subsidies into the issue of the variability of wind and how it can be overcome.

    Maybe because variability is a red herring and ignorantly asserting low penetration in a rigged market is ignorant.

    If variability was such a show-stopper, the markets (Markets) wouldn’t be risking the ventures in wind and solar. And developing the Smart Grid to address the issue of wind and solar variability beyond a particular % load on the outdated and fragile dumb grid.

    It used to be in this country that just because something was hard, it didn’t mean we stopped and threw up our hands and state ‘it can’t be figured out, I quit’.

    Maybe some think we are too dumb to solve the problem of fundamental change, but I’m not one of them. Alternatives are coming, whether some groups are scared or not.

    DS

  26. prk166

    So you’re claiming that despite huge subsidies going into wind production that the building on them is purely driven by….. what? The markets? So the markets aren’t willing to build a $300 million wind farm in exchange for $450 million in subsidies and tax cuts? Why are subsidies for fossil fuels market distorting yet ones for win are not? According the EIA, for each

    I have never ever spoken to market penetration of wind. I’m not sure why you bring that up.

    More importantly, I am not saying that variability is a show stopper. What I am saying is that it poses huge problems. It would mean for wind to be a big player, we would need to build 40,000 miles of new transmission lines. I am saying that because of winds extreme variability, for every 100MW of wind built we build another 100MW of NG. That isn’t very efficient. More so, that’s extremely expensive. Every megawatt of wind power produced requires 7-10 times more concrete and steel than a MW from nuclear. Every 1MW of wind power actually produced requires a 1MW of NG to sit idle.

    How does the smart grid overcome the variability of wind? How does a smart grid overcome that even a good wind site produces over half of it’s annual energy output in about 15-20% of a year? What do we do for that over 85% of the time? Does the smart grid produce electricity? The link you provided speaks nothing to it. It simply touches on well known generalizations about the smart grid, including it’s extremely high costs, all without offering any concrete research showing those large investments will pay off.

    As of right now, in order to put it to use on any sort of large scale like the ones many states have legally mandated must happen, we are looking at having to build just as much redundant power in new NG plants, less effeciently use that NG from constantly ramping production up and down, NG storage so there’s enough at the source to be used when needed….. or wait? Is the answer that to overcome variability we need to spend $10 billion / year on smart grids, building 40,000 miles of new transmission lines and…. and what? Pray that enough wind energy is produced on the great plains to keep the lights on? Does the wind not blow more in the spring and the fall than the summer and winter? Are the Great Plains immune from this? And how much overbuilding of wind power would we need to accomplish that? How much energy is wasted on the spinning reserves needed to be there available for when the changes.

    And at that how do we know that there is enough wind blowing in enough different areas that this would all work? I’ve seen a link showing how little of the US is capable of having wind worth harnessing. But how do we know that enough wind is blowing in Gillette or Valentine to make up for wind that’s not blowing in Amarillo or Burlington?

    As for the quitting comment, again, you’re creating falsehoods and avoiding addressing explaining exactly how the variability can be dealt with. No one is saying we need to quit doing anything. It’s not even clear what we’d be quiting over. What is it? Quit trying to do what? Make the US energy independent? Quit generating green energy? Quit what?

    There are a wide variety of things we can do going forward. I’m not sure why the issue is “it’s wind or nothing”. Especially given when the best of wind farms produce energy 40-60% of the time and at that produce more than 1/2 their output over the course of year during just 45 days of the year.

  27. Dan

    I’m not sure why the issue is “it’s wind or nothing”.

    This is perhaps the 6th time you’ve made something up that is, oh, 180º from what was written above, and asked questions that show you cannot speak to the issue. At least you are confident in your assertions. There is that.

    Out here.

    DS

  28. Scott

    Dan usually likes to offer his opinion with spins, on binary approaches, and then denies his message. Plus bringing in tangents & avoiding points.

    Because some investors are involved, along with much of gov, wind is really productive?

    Those who state that wind does not give consistent power are just trying to give up?

    Wind is always blowing somewhere, therefore its plenty for energy somewhere?

  29. prk166

    “I’m not sure why the issue is “it’s wind or nothing”. -prk166

    “This is perhaps the 6th time you’ve made something up that is, oh, 180º from what was written above,” – Dan

    That’s not true. As you clearly stated, and I quote “It used to be in this country that just because something was hard, it didn’t mean we stopped and threw up our hands and state ‘it can’t be figured out, I quit’.”

    I don’t understand why you feel the issue is wind or nothing. The issues I have with wind do not preclude a wide variety of options; they are simply with wind. In fact, I would argue that the problem is the more we invest in wind it will exponentially take away from those other options because it’s costs are far higher than it’s proponents are willing to face up to.

    ” and asked questions that show you cannot speak to the issue.” – Dan

    The issue is the extremely variability of wind. You have stated that it’s extreme variability is a red herring. I’ve touched on about a dozen reason why they variability of wind is an issue. Each time instead of explaining why those points aren’t true, you pull out responses like this. Why do you do this? Afraid to dig digger into the issue? Not familiar with it beyond bullet points? You clearly have an interest in time and responding, so why not put in marginally more and speak to the points? Is this an intellectual exercise for you or merely some chest pounding to feed the ego?

  30. the highwayman

    Frank said: Receiving a grant and being a lobbyist are TWO DIFFERENT THINGS. Or do you not understand that?

    THWM: That’s bullshit! It’s not like O’Toole is making art projects or tutoring math with children. He’s paid to defend an autos only political agenda for them!

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