GE, or any firm trying to lobby government, is in a tough position. If they have a story to tell, in this case, that wind power tax credits pay for themselves and are, at this time, critical to the ongoing success of the industry, who is going to tell it for them? There is only so much research the large non-profits can fund, and even then there are few guarantees the research will not be influenced somehow.

GE should at least get points for putting their own name on the report instead of funding some third party to write the report for them (tobacco industry anybody?)

What I find discouraging is obfuscation has become such an accepted business practice we take for granted that companies and individuals will tell "their side of the story." We are beginning to see everything as "spin" and, in some respects as all equally (in)valid. There is less of an instinct to look at something critically and a greater tendency to attack, or support, the source.

(This is perhaps most pronounced in political coverage, many news organizations forgetting they can and should look at candidates' positions critically rather than making sure the candidates get equal time: it is OK to show favor to a candidate on an issue when the other is wrong)

In this case, GE makes a compelling argument, but an argument that is based almost completely on the JEDI model. It is also important to look at other uses of government funds. For example, would that 2.1 cents per kWh be better spent on energy efficiency projects (which, incidentally, happens to be the industry I work in.)

Actually, it's been argued for years that IF ONLY general electric or lockheed or any of the other regulars at the federal trough would buy up or partner with alternative energy companies we might have a chance ....

(I seem to recall unhappy "merger and acquisitions" that went no where except that the start-ups died -- like the electric car, y'know?)

Its no surprise they make wind turbines - they're an extremely diversified company and do lots of things. In any event, it makes sense that an *energy* company will look into profiting from *energy* - no matter what. So, GE says wind power is a good deal. Well, it happens to be one. They happen to make turbines. No surprise. They're an energy company. Would you rather General Mills made wind turbines or Sutter Health or Tom's of Maine?

G.E. makes jet engines among other things.

Get you WAR on, NBC!

G.E. makes jet engines among other things.

Get your WAR on, NBC!

This seems to be the same idea as the Schaefer curve...though this is applied to a very specific industry.

From my brief glimpse, it seems that they are saying that a small change in the tax policy will create a large change in the incentive to invest, thereby creating an increase in tax revenues.

I wonder if they account for the tax revenues that will be lost due to the diversion of private investment from other opportunities. This deserves a close look!

Who funded the study is not the most important question. The questions to be asking are:

- Is the study transparent? Who collected the data? How?

- Are the results verifiable and the conclusions defensible?

- Do people who stand to benefit from GE being wrong agree with the substance of their conclusions?

As Boondoggle already pointed out, the fact that they're willing to put their name front and center on the paper is an important (first) step.

In addition, since the presentation in the paper is pretty straightforward, it's easy to see that they're leaving a bunch of macroeconomic factors out.

For example, as they say themselves in a fit of due diligence, they leave out any impact analysis with respect to the rest of the energy sector.

But they also don't take into account consumer market effects — if fossil fuel costs continue to climb, all that extra wind power coming online in the next few years may provide consumers with a substantial amount of extra disposable income compared to a scenario in which they're still burning gas or coal for electricity.

They also don't attempt to measure the value of emissions reductions (in terms of insurance costs, carbon sequestration, loss of land or efforts to prevent it, etc). That's certainly not something that a company like GE would be accustomed to in an analysis like this, but sooner or later that's exactly the sort of hard-nosed economic calculus we're all going to need to become fluent in. So it would have been interesting to even just attempt to factor that in.

Ultimately, most of where GE gets its estimated net value to the US Treasury is in expected operational wage costs and vendor revenue. Another way of putting that is to say that, in essence, GE's argument is that the tax subsidy is a break-even proposition through the construction phase, and the gravy comes from operations.

That's a convenient argument for GE, a developer rather than a utility, to make. But it's also one that's pretty easy to substantiate — and not just for the wind sector either.

hey andrew,

excellent point. this was an oversight and we've updated the post.

thanks,

chris

Buy them. Put them up. Get them going.

I hope GE makes solar panels too. Buy them. Put them up. Get them going as well. Let's go people!

That high tech windmills are being made by the tofu-bamboo unwashed hippie electric cooperative yet. I guess you'll have to swallow your rage and hammer your swords into plowshares.

I'm w kickstarts (above), have GE make all the turbines they can. Wind energy is nothing but good.

I wish we were spending money on alternative energy rather than pissing it away in Iraq.

A wind turbine on every rooftop, and every rooftop made of PV material. It'll pay off by and by.

I favor focusing on the accuracy of the information in the study, yeah. That seems more important than the source.

If Rumsfeld told me the sky was blue, of course I'd check, but when it looked right to me, I would certainly support his claim.