Thursday, January 24, 2013

Government Crony Madness In Action (Wind Farm Edition)

Wind farms in the Pacific Northwest -- built with government subsidies-- are now getting paid to shut down as the federal agency charged with managing the region's electricity grid says there's an oversupply of renewable power at certain times of the year, reports FOX.

Note the part of the explanation in the clip below where it is stated that the problem is too much energy being generated because of melting snow. Econ 101 teaches that there is no such thing as oversupply, i.e. "too much" supply. Over supply can only occur when there are price controls in existence, above market prices. So what is really going on here? If you dig deep enough I'm sure you will find not only crony wind farm operators getting paid by government, but that there are some sort of government price controls limiting energy prices from falling, thus creating potentially even more of a benefit to the wind farm producers (depending upon price elasticity).

(ht Joris De Donder)


  1. Either government will be magically right in subsidizing what constitutes 3% of energy production, or they're looking to roll us back to the 17th century.

  2. didn't this start under Jimmy Carter, along with the wrist-spraining one-door-shall-always-remain-closed policy?

  3. in an electric grid the power consumed has to equal the power generated. other wise the frequency (60hz) will began to rise and fall which is not good.
    So there is a such thing as so much supply in a grid. The frequency would begin to rise. Some where some one has to A) stop generating or b) consumption has to rise.
    Some utilities have it set up so that they pay a owner of a big building to run there AC units. Things like that.
    Not sure how this would work in a free market but the electric power grid and utilities is a huge bureaucracy.