(good stuff. - promoted by phillip anderson)
We had our "State of the State" Speech yesterday (1-7-09), and the state of NY was described by our Gov as "perilous". No beating around the bush on that one. The financial calamity that started about 1.5 years ago and really became well noticed when Bear Stearns went bust has really clobbered this state. Actually, then there is "The Paper Market" - short term loans (one day to a few weeks to a few months), where trillions of dollars was routinely loaned to companies to cover short term expenses. All these loans generated fees, which generated income. That market crashed when Lehman Brothers tanked (they had a couple of billion dollar loans that got stranded, and the inability to pay shut down the ENTIRE market, since dependability of loan repayments was essential to that market). Can't get a loan to buy a car or a load of fertilizer, or businesses can't borrow a few million for a week to meet payroll...that's the paper market in action, or inaction.
Anyway, the state of NY was losing taxable income at the rate of $60 million PER day each day since August, and the 2009 budget is in the tank to the tune of $16 billion or more. There are lots of long term reasons for this, and solutions appear to be a whole series of slash and burn cuts/mini-tax rises (the one I like is on sugar water...who needs that diabetes promoting junk, anyway?). Maybe they will even tackle sub-urban welfare (money for affluent school districts used to be required in order to get money for poor people who really need the help when we had a Republican Gov and Republican Senate). And maybe they will even raise the marginal income tax on rich people, some of whom are significantly responsible for the current mess. We shall see. The speech can be found here:
http://www.ny.gov/governor/key...
However, one of the more positive thins in the speech was the line that "Energy is the new currency". Hot dang...sense made at last. To be inefficient with energy is to waste money..but when energy is cheap and apparently endless (the Gov is supposedly knowledgeable about Peak Oil and possibly about Peak Gas), who cares, it's only chump change. Well, energy, especially fossil fuel based (oil and natural gas in particular) energy, is no longer cheap, and no longer are steady supplies even assured, even if the money is there. Maybe is a word we are not used to with regards to energy availability..we want it when we want it and where we want it. Welcome to that brave new world....
Anyway, in one of the better moments, The Gov said that he wants NY to achieve 45% of our electricity from renewable sources by 2015...only 7 years away. Cool, setting a decent goal, not these wimped out namby-pamby goals like 20% by 2020 or 2030 (http://www.newwindagenda.org/ ). Actually, we could do better than 45% by 2015, but exceeding expectations is perfectly allowed in this case.
Actually, it is not as difficult to achieve as it seems. NY on average uses about 16.5 GW for 19.5 million people, so we are above average with respect to efficiency, but there is room for improvement there. 45% of 16.5 GW would be 7.5 GW. There is also about 3 GW of renewable electricity made, including Niagara Falls (1.4 GW), the St Lawrence River (0.8 GW), some miscellaneous hydro (at least 0.3 GW) and we should have about 1300 GW of wind operating in a few weeks (see http://awea.org/projects/Proje... which would deliver about 0.4 GW. So we start off with a need to get 4.5 GW delivered.
For wind, that would be 15 GW (15,000 MW) of wind capacity delivering at an average of 30%. That would cost about $30 billion in parts and installation, and would be a great stimulant to our economy, which could definitely use it. Who knows, with $20 to $25 billion in new wind turbine sales in the next 7 years (the rest is installation), maybe we could get a wind turbine factory or new in this state!!!!! After all, jobs are good, and we could use the jobs, especially good jobs. Maybe convert some of those abandoned auto and auto parts factories, old boiler factories, old steel plant sites, etc now serving as wind turbine parts (made elsewhere) warehouses/storage sites. Other good prospects for NY are run-of-river hydro (the Niagara River should be good for a few hundred MW, and the same goes for the St. Lawrence and Allegheny Rivers). then here is tidal...Long Island Sound should be good for at least 2 GW (essentially uses run-of-river units - no dams needed) See http://www.bwea.com ---> tidal. We could also do things like the McNeil Power plant (http://www.burlingtonelectric.com/SpecialTopics/mcneilfacts.htm) in Burlington, Vermont which uses wood deliberately grown in Vermont as a crop for the wood burning facility. Every little 50 MW helps...Most of the state grows trees really nicely (and even better with a touch of nitrogen fertilizer....), since drought is a rare concern in this part of the country. More info on the biomass can be seen here see page 31: http://www.osti.gov/bridge/ser...
Anyway, the big question is how this goal of 4.5 GW delivered in extra renewable electricity is going to get financed, since we are cursed with an electricity pricing system that has a lot in common with a casino. And in these days, if you are a business and can't say what your cash flow will be (know what the wind resource is, but no idea what the price for electricity would be, so no idea of the revenue stream, which could easily vary bay a factor of 3), that would seem like a risky proposition. A risky proposition means risky interest rates, which translates into higher installation costs than would be the case for a project with a known cash flow, and besides, bankers don't like financial risk any more. And since the State of NY is less than broke, no money source there either. And depressed prices for electricity are going to be the norm as long as the economy is in the dumpster...
This sounds like a perfect case for a Feed-In Law. Such a deal - rapid increase in new projects, rapid increase in taxes from these business deals, rapid increase in employment, less unemployment and welfare expenditures, maybe even some new businesses making parts and even complete units. Sounds good to me - http://www.wind-works.org. All we have to do is add this to or just plain dump the casino approach to pricing renewables - see http://www.nysio.com for a view of that head spinning mass of complications in NY's electricity pricing gambling house.
Also posted on Stranded Wind:
http://strandedwind.org/node/4119 |
