Andrew Jameison, chair of the RenewableUK wind energy trade
association, to head up a Government and industry task force "in
driving the work necessary to bring the levelised costs of offshore
wind down to £100/MWH".
What prompts me to blog is the utter economic stupidity of the
proposal. The price paid for wind turbines is a simple matter of
supply and demand, not the underlying costs of manufacture. Reducing
the cost of manufacture will simply increase the turbine industry
profitability. Why? Well, there are only a handful of manufacturers
in a world of buyers. When you have many more buyers than suppliers,
the balance of power is in the hands of the suppliers, and suppliers
can auction their capacity to the highest bidder, in the USA, China,
Perhaps the UK government is seriously proposing to rebalance the
power towards buyers, by increasing the number of suppliers to such an
extent that there are more manufacturers than users in the world, such
that buyers can auction their contracts to a competitive universe of
manufacturers? Such a coordinated attempt to distort a market seems
frankly Marxist in it's lofty aspirations.
Why does it matter to me? Well, I grew up in an industry where the
fittest win. One where the government didn't pick the winners, the
white heat of competition did that. I saw the competitiveness of large
scale biomass 5 years ago, and yet successive layers of government
meddling have conspired to thwart my attempts to deliver the concept.
We live in a world where government intervention is being rightly
punished for it's folly (think Euro) but they won't learn.