Environmental Engineering Reference
In-Depth Information
power developers that wish to exploit ofshore energy potential. Even if
the government decides not to directly subsidize wind power development,
these grid connection costs will have to be incurred before being recovered
from electricity rate premiums. he ability and willingness of a nation to
undertake such costs depends signiicantly on its iscal health.
Nations that are faced with iscal deicits or high levels of public debt ind
it more diicult to directly subsidize the development of wind power. Such
nations need to creatively cultivate solutions that pass along the costs to
end-consumers in an expedient manner. In the United States, numerous
utilities have adopted voluntary green purchase programs to allow consum-
ers who are willing to pay more for green electricity to do so. In the process,
this subsidizes development. In the Canadian province of Ontario, despite
facing a paralytic iscal deicit, the government is managing to subsidize
wind power development by passing rate hikes through to the end-con-
sumer, thereby generating the funds necessary to provide a healthy feed-in
tarif. In Japan, the government is grappling with the largest level of public
debt among all industrialized nations and has historically been reluctant to
pass along electricity rate hikes to end-consumers, who are already paying
some of the highest rates in the world. However, since the Fukushima disas-
ter, the high cost of natural gas-ired power has led to further electricity
rate increases. his has desensitized the Japanese public from adverse reac-
tions to rate hikes and has made it possible for the government to devise an
aggressive FIT for supporting wind power which can then be passed along
to the end-consumer.
he lesson for policymakers is that a transition to wind power does
indeed come at a inancial cost, which the government must somehow be
able to bear. However, a number of policy tools are available to governments
to permit creative and strategic deployment of policies designed to allay the
iscal pain.
10.5.4 Political Factor 4: Nationalization of Utilities
he case study research indicates that nationalization of utilities is not
necessarily desirable in terms of catalyzing enhanced wind power capac-
ity expansion. To a certain extent, this inding is counterintuitive. One
would assume that public monopolies, which are guided by more than
proit-seeking motives, should be more open to wind power development.
Moreover, one might argue that public monopolies permit wind power
policy to be more efectively implemented thanks to the centralized nature
of grid and electricity generation management. However, the reason why
